Coffee Slumps to Lowest in Two Years on Brazil ‘Monster’ Crop
Coffee futures slumped to the lowest price in more than two years on signs that supply will outweigh demand due to a bumper crop in Brazil, the world’s largest grower and exporter.
In the year that started Oct. 1, world production is estimated at 144.5 million bags, a 7.3 percent increase from a year earlier, according to the London-based International Coffee Organization. Brazil’s 2013 output may reach 50.2 million bags, even as trees enter the lower-yielding half of a two-year cycle, compared to the 2012 record of 50.8 million, the country’s Agriculture Ministry said.
“This Brazil crop is going to be a monster,” Joe Scaduto, a coffee broker at New York-based JPS Commodities LLC, said in a telephone interview.
Arabica-coffee for March delivery tumbled 1.4 percent to close at $1.421 a pound at 2 p.m. on ICE Futures U.S. in New York, the lowest settlement for a most-active contract since June 2010. Prices have fallen 35 percent from a year ago.
Production last month was up 64 percent from a year earlier in Colombia, the second-largest grower of arabica beans, President Juan Manuel Santos said today in a speech to growers.
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