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Coffee Falls as Brazil and Colombia Sell Beans After Price Gain

By Ron Day
Bloomberg
June 8, 2007

Coffee fell in New York after Brazil and Colombia sold beans to take advantage of a three-week rally.

Futures had jumped 15 percent since May 1 to a three-month high on June 4. Brazil, the world's biggest coffee grower, and Colombia, the third-largest, are locking in prices after some sales by speculators, said George Saffadi, a trader with Olam Americas Inc. in White Plains, New York.

``Brazil and Colombia are coming to market,'' Saffadi said. ``They have coffee to sell and they are hedging.''

Coffee for July delivery fell 2 cents, or 1.7 percent, to $1.1495 a pound on the New York Board of Trade at 12:24 p.m.

Colombia, which is harvesting its smaller mid-crop, is boosting production to meet increased demand from former Soviet Union countries as Brazil's output declines.

Brazil's production dropped in the current season after trees entered the slower half of a two-year cycle and dry weather hindered flowering.

Vietnam is the second-biggest coffee grower.

To contact the reporter on this story: Ron Day in New York at rday1@bloomberg.net .

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