Coffee fell for a fifth day in London on signs supplies will be enough to meet demand even as top producer Brazil enters a low-cycle production year. Sugar advanced.
Output in the South American country will fall 9.6 per cent to 43.5 million bags in the 2011-12 season as trees enter the lower-yielding half of a two-year cycle, the Agriculture Ministry said. That would be the smallest drop ever recorded for an off year, the International Coffee Organisation said in its June report.
While the 2011-12 season starts in October in most countries, the harvesting in Brazil is already under way.
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"Harvesting pressure from Brazil's current crop could weigh on prices in the short term," German researcher F.O. Licht said in a report. "Market participants are currently focusing on the reducing frost threat to Brazil's coffee trees as weather conditions look favourable for now."
Robusta coffee for September delivery fell $37 (Dh135) a tonne, or 1.7 per cent, to $2,120 a metric tonne on NYSE Liffe in London.