Coffee Futures Slump on Ample Brazil, Colombia SuppliesMarvin G. Perez
Coffee futures dropped on signs of ample supplies in Brazil, the world’s top grower of arabica beans, and Colombia, the second-biggest. Cocoa, sugar, cotton and orange juice also fell.
Brazil’s 2013 output may reach 50 million bags, approaching the record of 50.8 million in 2012, as trees enter the low-yield cycle of the biennial crop, said Jose Milton Dallari, a director at the National Agricultural Society in Rio de Janeiro. Production in Colombia climbed 23 percent in December from a year earlier, an industry group said.
“There’s selling coming from Brazil,” Hernando de la Roche, a senior vice president at INTL FCStone, said in a telephone interview from Miami. Farmers still are offering supplies from the 2012 harvest, he said.
Arabica coffee for March delivery dropped 1.5 percent to settle at $1.4815 a pound at 2 p.m. on ICE Futures U.S. in New York. The price has tumbled 33 percent in the past 12 months.
Brazil’s shipments in the five months ended Nov. 30 fell 10 percent, according to Cecafe, an exporters’ group. Colombia’s National Federation of Coffee Growers estimates that output will be 10 million bags this year, above the 8.3 million forecast by the U.S. Department of Agriculture. A bag weighs 60 kilograms, or 132 pounds.
“Coming in closer to 10 million would be a huge increase in arabica supply that the market wasn’t expecting just yet,” Judy Ganes-Chase, the president of J. Ganes Consulting, said in an e-mail from Panama City, Panama.
Cocoa futures for March delivery slumped 2.3 percent to $2,215 a metric ton in New York. Earlier, the price touched $2,206, the lowest since July 25.
Raw-sugar futures for March delivery declined 1 percent to 18.67 cents a pound.
Cotton futures for March delivery fell 0.8 percent to 75.12 cents a pound.
Orange-juice futures for delivery in March slid 1.1 percent to $1.0935 a pound. Earlier, the price reached $1.092, the lowest since Nov. 13.