Feb. 17 (Bloomberg) -- Coffee prices in Brazil, the world’s largest producer, extended a decline as arabica futures tumbled and touched the lowest price in 15 months yesterday, local brokers said.
The price of fine cup arabica beans is 420 reais ($245) to 450 reais for a 60-kilogram (132-pound) bag, according to Flavour Coffee. That compares with 480 reais on Feb. 3, when the price fell below 500 reais for the first time since August, the Rio de Janeiro-based broker said, and 470 reais to 480 reais on Feb. 9.
Arabica futures dropped for a seventh consecutive day yesterday, falling to as low as $1.978 a pound, the lowest price for the most active contract since Nov. 4, 2010, on expectations of a big harvest in Brazil in the season starting in July. The commodity for May delivery was little changed at $2.0145 by 8:25 a.m. today on ICE Futures U.S.
It’s a “scary movie for many people, especially for some producers,” Thiago Cazarini, a broker at Varginha, Brazil-based Cazarini Trading Co., wrote in a report yesterday. “If prices keep coming down it won’t take long for them to sell a lot of the stocks they have.”
Coffee output in Brazil will rise to a record 49 million to 52.3 million bags this year, from 43.5 million last year, the Agriculture Ministry’s crop-forecasting agency, known as Conab, estimated on Jan. 10.
The “local market followed ICE falls this week, with prices trading as low as 420 reais, a quite impressive drop,” Flavour Coffee said in a report e-mailed yesterday.
To contact the reporter on this story: Isis Almeida in London at Ialmeida3@bloomberg.net
To contact the editor responsible for this story: Claudia Carpenter at Ccarpenter2@bloomberg.net.