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Coffee, Sugar Futures Decline on Brazil Export Outlook

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Aug. 22 (Bloomberg) -- Coffee futures fell, capping the longest slump in 13 weeks, on concern that the slumping real will spur more exports from Brazil, the world’s top shipper. Sugar and cotton slid, while orange juice and cocoa rose.

The real yesterday touched a four-year low against the dollar, boosting the incentive for growers to export more coffee priced in the greenback. On Aug. 20, stockpiles at warehouses monitored by ICE Futures U.S. reached the highest since February 2010. Output in Vietnam, the second-largest producer, may climb to a record next season, Commerzbank AG said today.

“Everybody thinks that the Brazilians are going to sell as much as they can to take advantage of the weak real,” Jack Scoville, a vice president for Price Futures Group in Chicago, said in a telephone interview.

Arabica coffee for December delivery fell 0.1 percent to settle at $1.1705 a pound at 2 p.m. on ICE in New York. The price dropped for the sixth straight session, the longest slump since May 22. Earlier, the price touched $1.1635, the lowest for a most-active contract since Aug. 2.

Coffee has declined 19 percent in 2013. The U.S. Department of Agriculture forecasts that global output will exceed demand for a fourth straight year.

Raw-sugar futures for October delivery fell 0.2 percent to 16.28 cents a pound. The price dropped for the sixth session, the longest slide since July 5. Brazil is the top exporter.

The International Sugar Organization today raised its forecast for global output in the season starting Oct. 1 by 29 percent. Supply will top demand for the fourth straight year.

“The estimate is one more piece in the bearish puzzle,” Frank Jenkins, the president of Jenkins Sugar Group in Wilton, Connecticut, said in a telephone interview.

Cotton futures for December delivery declined 0.1 percent to 84.18 cents a pound. In four days, the price has plunged 9.8 percent, the most since Nov. 21, 2011.

Orange-juice futures for November delivery rose 0.4 percent to $1.385 a pound. Cocoa futures for December delivery advanced 0.2 percent to $2,454 a metric ton.

To contact the reporter on this story: 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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