Coffee farms in Brazil had feared that a long spell of hot, dry weather might damage their crop, but forecasters are projecting rain for the next week across the state of Sao Paulo and Minas Gerais. That would help keep the coffee harvest strong, and traders reacted by driving down the price of the bean, Bloomberg News reported Monday.
Arabica coffee futures lost almost 4 percent to settle at $1.9195 per pound on the Intercontinental Exchange futures market in New York; on London's Liffe exchange, robusta coffee futures droped 0.9 percent to settle at $1,654 per ton.
The rains in Minas Gerais, writes the news service, are especially important because the trees must experience relatively humid conditions in order to flower and turn into beans properly between September and November.
"Perhaps the threat of dry weather is dissipating," Raymond Keane, a Balzac Bros. trader in Charleston, South Carolina, told Bloomberg. "The rains are starting to increase. That will be good for the coffee."
Cocoa and sugar futures also fell in commodity futures markets around the globe.
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