Arabica coffee fell the most in three months on speculation that ample supply in Brazil, the world’s leading producer and exporter, will compensate for production losses from a fungal disease in Central America.
Goldman Sachs Group Inc. cut its price forecasts for the beans favored by Starbucks Corp., citing improving prospects for the 2013 crop in Brazil, the bank’s analyst Damien Courvalin, said today in an e-mailed report. As of March 31, farmers in the South American country sold 75 percent of the most recent harvest compared with 86 percent a year earlier, Porto Alegre, Brazil-based consulting firm Safras & Mercado estimates.
“This improving Brazilian production outlook offsets additional downward revision to Central American production, on damages from the leaf rust fungus,” Courvalin said.
Arabica coffee for delivery in July tumbled 3.9 percent to settle at $1.3755 a pound at 2 p.m. on ICE Futures U.S. in New York, the biggest drop since Jan. 22.
Prices will be at $1.45 in three, six and 12 months, Goldman said. That is down from previous forecasts of $1.55, $1.65 and $1.75, respectively, it said.
Coffee was the worst performer today among the 24 raw materials tracked by the Standard & Poor’s GSCI Spot Index, which declined as much as 1.1 percent after weak manufacturing data in China and the euro area.