Arabica-Coffee Futures Climb Above $2/lb

Leslie Josephs

  NEW YORK--Arabica-coffee futures rose above $2 a pound Wednesday as dry weather from Brazil to

Guatemala fed concerns over the world's supply of coffee.

  Arabica for December delivery on the ICE Futures U.S. exchange was up 2.1% at $2.0150 a pound, the

highest since Aug. 1.

  On Tuesday, the government of Guatemala, Central America's second-largest coffee grower after

Honduras, declared a state of emergency because of extreme drought.

  It is the latest threat to coffee production, which was already hit this year by a severe drought

in top grower Brazil. Industry groups and exporters have lowered their estimates for output this

year, which has sent prices to two-year highs, prompting roasters such as Folgers maker J.M. Smucker

Co. and Starbucks Corp. to raise prices. Arabica-coffee futures are up 81% this year.

  Guatemala "could be just like Brazil," said Jack Scoville, a vice president at Chicago brokerage

Price Futures Group. "The potential for lower crops this year and next are decent."

  Brazil's weather continues to fuel worries over coffee supplies. Early rains there followed by

current dry weather could cause coffee trees to abort flowers that opened early, said Rodrigo Costa,

coffee director at brokerage Newedge.

  That process would prevent coffee cherries, which contain the seeds that are roasted and ground to

make coffee beverages, from developing.

  In other markets, raw sugar for October delivery was up 1.1% at 15.88 cents a pound, following an

estimate showing the world's sugar surplus slipping next year.

  Global sugar production is likely to outpace demand by 1.3 million metric tons by Sept. 30, 2015,

the London-based said Tuesday. While that would be the fifth consecutive surplus, it is about a

quarter of the surplus the ISO has forecast for the current year.

  November orange-juice concentrate was up 0.2% at $1.5195 a pound, while December cocoa was 0.5%

lower at $3,199 a ton. December cotton was 0.1% lower at 66.83 cents a pound.