Prices fell because of “origin selling, while no funds are seen on the buy side,” said Rodrigo Costa, a vice president at brokerage Newedge USA LLC in New York. “Funds may be testing the water at the beginning of the year.”
Coffee gained 6.1% last month. In the last three weeks of January, hedge-fund managers and other large speculators increased bets on rising prices for the first time since early September. Funds wagered on a drop through most of the fourth quarter, U.S. Commodity Futures Trading Commission data show.
Arabica coffee futures for March delivery fell 0.5 cent, or 0.4%, to $1.1925 a pound on ICE Futures U.S. in New York.
The market is trying to “consolidate” around $1.20, Costa said.
Global coffee exports in December rose 18 percent to 8.87 million bags from a year earlier, while shipments from Brazil jumped 37% to 3.2 million bags, the International Coffee Organization said on Jan. 30. A bag weighs 60 kilograms (132 pounds).
Brazil is the biggest grower of milder-tasting arabica variety while Viet Nam produces the most robusta beans, used for instant coffee.
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