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Coffee Slides to Four-Year Low on Brazil Supplies; Sugar Drops

Aug. 1 (Bloomberg) -- Coffee fell to a four-year low on signs of few threats of weather damage to groves in Brazil, the world’s largest producer. Sugar also dropped, while cotton, cocoa and orange juice advanced.

Brazil’s coffee areas face no threat of cold until Aug. 15 and will remain mostly dry, after above-normal rains in July caused some damage to trees, Somar Meteorologia, a Sao Paulo-based forecaster, said yesterday. About 13 percent of the crop was sold as of June 30, compared with 20 percent a year earlier, and growers still had beans left from last year’s harvest, consulting firm Safras & Mercado estimates.

“There’s no more speculation about possible frost in Brazil,” Roberto Tito Higgins, a director at Intercap Corretora, a broker in Sao Paulo, said in a telephone interview today. “Brazil has more coffee unsold than we had last year, and funds have come back to sell.”

Arabica coffee for delivery in September fell 2.5 percent to settle at $1.156 a pound at 2 p.m. on ICE Futures U.S. in New York, after touching $1.1535, the lowest for a most-active contract since July 16, 2009.

Global coffee production will exceed demand for a fourth straight year and inventories will climb to the highest since 2009, the U.S. Department of Agriculture estimates. This year, Brazilian farmers will collect a record crop for the low-yielding half of the biennial cycle, the government forecast.

“We have massive supply this year, and we’ll have another big crop out of Brazil in 2014,” James Cordier, the founder of Optionsellers.com in Tampa, Florida, said in a telephone interview. Prices may drop to $1.10 by September, he said.

Raw-sugar futures for delivery in October slid 0.8 percent to 16.83 cents a pound on ICE, the first loss since July 24.

Cotton futures for December delivery added 0.3 percent to 85.43 cents a pound.

Cocoa futures for delivery in September gained 0.1 percent to $2,301 a metric ton, while orange-juice futures for delivery in the same month rose 0.5 percent to $1.446 a pound.

To contact the reporters on this story: Luzi Ann Javier in New York at ljavier@bloomberg.net; Marvin G. Perez in New York at mperez71@bloomberg.net

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net

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