Arabica-Coffee Futures Drop to Two-Week Low on Ample Supplies

Brazilian exports to Europe fell 15%

Coffee Coffee

Coffee futures fell to a two-week low in New York on ample supplies in Brazil, the world’s top producer and exporter, just as European consumers face a second year of economic contraction.

Brazilian farmers sold 60 percent of this year’s crop by Dec. 31 compared with 76 percent a year earlier, consulting firm Safras & Mercado said Jan. 17. In 2012, the country’s exports to Europe, the biggest consuming region, sank 15 percent, according to data from Cecafe, the nation’s exporters’ council. Yesterday, the International Monetary Fund cut its global growth forecast, projecting a second year of contraction in the euro region.

“Brazil has been holding back a lot of coffee,” Hernando de la Roche, a senior vice president at INTL FCStone in Miami, said in a telephone interview. “There’s concern about who’s going to buy it” as Europe’s economy shrinks, he said.

Arabica coffee for March delivery tumbled 2.6 percent to settle at $1.4655 a pound at 2 p.m. on ICE Futures U.S., after touching $1.461, the lowest for a most-active contract since Jan. 9.

Stockpiles at warehouses monitored by ICE climbed to 2.612 million bags yesterday, the highest since March 2010. The inventories surged 68 percent in 2012, the biggest gain since 2000, exchange data show. A bag weighs 60  The ample supplies are overshadowing concern that leaf rust, a fungus that attacks foliage, will curb output in Central America and Mexico, de la Roche said.

Copyright 2014 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

comments powered by Disqus
Check out Futures Magazine - Polls on LockerDome on LockerDome