The price of coffee plummeted 3.7 percent Friday on expectations that bountiful harvests in Brazil and Central America will add to already ample global supplies.
Coffee for March delivery fell 5.8 cents to end at $1.506 per pound. The price has fallen nearly 34 percent this year, largely on predictions that Brazil's harvest will be robust.
Crop development in Brazil has been good while Central America's harvest is getting under way, Jack Scoville, vice president at Price Futures Group, said in an email.
Investors have begun selling their holdings to lock in profits, Vision Financial Group commodities analyst Boyd Cruel said.
Meanwhile, political wrangling over the "fiscal cliff" pushed prices lower for most commodities. Many investors are staying out of the market until they have a better idea about whether the Obama administration and Congress can agree on a new budget by the end of the year.
Automatic government spending cuts and steep tax increases will take effect Jan. 1 unless an agreement is reached. Economists believe that could push the U.S. back into a recession, which would cut demand for commodities.
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