Arabica-Coffee Futures Give Up Gains Amid Equities' Slide

Ira Iosebashvili

  Arabica-coffee prices turned lower Wednesday, as investors unnerved by a steep slide in stocks

locked in profits on recent gains.

  Arabica for December on the ICE Futures U.S. exchange settled down 2.7% at $2.1600 a pound, its

steepest slide since Sept. 25. Earlier in the session, prices rose to $2.2455 a pound, less than one

cent away from nearly three-year highs.

  Prices have doubled this year as Brazil's worst drought in decades hurt this season's crop and

weakened trees, casting doubt over next year's harvest from the world's top coffee producer. But

Wednesday's sharp decline in U.S. stocks jangled nerves across asset markets, pushing some investors

to sell, analysts said.

  "At the end of the day, people just decided to take some money off the table and let the smoke

clear and see what happens next," said Jack Scoville, a vice president at Chicago brokerage Price

Futures Group.

  The Dow Jones Industrial Average fell more than 400 points during the day as global growth worries

pushed investors into safe-haven government bonds and gold. The benchmark stock index was recently

down 1.8% at 16026.

  Also pushing down prices was a weaker Brazilian real, analysts said. Brazilian coffee producers

are incentivized to sell more of their beans when the local currency slips against the dollar

because the profits in terms of the real rise. The dollar was recently up 1.4% against the Brazilian

currency, at 2.4368.

  In other markets, orange juice for November was up 1.9% at $1.3680 a pound. Cocoa for December was

up 1.6% to $3,153 a ton.

  Raw sugar for March was down 1.8% to 16.50 cents a pound, while cotton for December was 0.7% lower

at 63.71 cents a pound.