Coffee Growers gear up,coffee prices may fall.

Rain forecast for brazil.May boost up production in brazil. It may not be a good option to hoard beans for long,hoping for a further price increase.

BY DANIELLE ROSSINGH

Robusta coffee fell in London on speculation rain may boost the harvest in Brazil, the world’s biggest producer and exporter, easing concerns about a global shortage.

Coffee prices in London jumped 56 percent last year partly on speculation that drought has damaged the crop in Vietnam, the world’s No. 2 producer. Robusta beans are used in instant coffee by companies including Nestle and Kraft Foods.

”A new cold front will bring more beneficial rain to the coffee belt in Brazil, especially the parched areas of Minas Gerais and Espirito Santo,” Sucden (U.K.) Ltd., a London commodities broker, said in a report Monday, citing a forecast from weather forecaster Somar.

Robusta for delivery in May, the most active contract, fell as much as $17, or 1.5 percent, to $1,140 a metric ton on London’s Liffe exchange Monday. The contract traded at $1,142 as of 12:58 p.m. local time.

Arabica for delivery in May dropped 1.1 percent to $1.0760 a pound on March 10 on the New York Board of Trade.

Among other soft commodities trading in London, white sugar slid 50 cents, or 0.1 percent, to $447.50 a ton. Cocoa for March delivery fell 9 pounds, or 1 percent, to 871 pounds ($1,504) a ton on the Liffe exchange.

”Investors are taking profit, as we’ve seen some big moves in cocoa recently,” Christoph Eibl, head of commodities trading at Zug, Switzerland-based Tiberius Asset Management AG, said in an interview.

Investors had been buying cocoa on speculation that rebels in Ivory Coast, the world’s biggest cocoa producer, ”will be hitting the supply side, while demand from Asia is growing,” he added.

Source:Bloomberg News

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