Coffee prices decline on hopes of improved supply

Coffee prices fell on Friday on expectations that Brazilian growers will produce a bountiful harvest later this year. Coffee for May delivery fell 2.95 cents to finish at $1.8235 (Dh6.70) per pound. The price has fallen 19.3 per cent this year on the prospect that global inventories could expand. Brazil's crop appears to be in good condition, prompting many traders to speculate that growers will have a good harvest in about three months. That could ease concerns about reports of lower coffee production in Colombia, analysts said. Sterling Smith, a market analyst at Country Hedging LLC, thinks that the price could fall into a range between $1.65 per pound to $1.70 per pound, but noted that could be offset by strong overall demand. Despite the falling futures prices, consumers aren't likely to get a break at the retail level because manufacturers are paying higher costs to produce and ship their products, he said. Other commodities Other commodities were mixed as traders evaluated a batch of fresh economic reports for clues about the US economy. The Federal Reserve said that industrial production rose 0.3 per cent in February, which was slightly lower than economists had expected. Electronics, energy products and electrical equipment manufacturing increased, but auto production declined. In addition, a hefty increase in retail gasoline prices sent the consumer price index up 0.4 per cent last month, its largest gain in 10 months, the Labor Department said. Excluding higher pump prices, food prices were unchanged for the first time in 19 months. And, the University of Michigan's consumer sentiment index came in below analysts' expectations, driven by worries about gas prices. Copper for May delivery fell 1.95 cents to finish at $3.878 per pound, April platinum fell $8.40 to $1,675.50 per ounce and June palladium ended down $8.20 at $701.70 per ounce. April gold dropped $3.70 to end at $1,655.80 an ounce and May silver fell 12.2 cents to $32.604 per ounce. In energy trading, benchmark crude rose $1.95 to finish at $107.06 per barrel on the New York Mercantile Exchange. Heating oil increased 5.94 cents to finish at $3.2819 per gallon, gasoline futures rose 6.84 cents to $3.3569 per gallon and natural gas ended up 4.7 cents at $2.326 per 1,000 cubic feet.