Overproduction in Brazil, ICE Arabica Coffee fell to a new low on Wednesday

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Global oversupply weighed on the market, with ICE Arabica coffee futures falling to a new low on Wednesday, while new York cocoa futures plunged nearly 3 per cent to a three-month low on the same day.

The minister of agriculture of Brazil, a big coffee producer, told him that although coffee prices have been low, Brazilian growers are basically able to produce at these price levels. Traders said the market was being dragged down by excess supply, particularly in Brazil, the main producer.

Arabica coffee fell 1.9 cents, or 2%, to 94.75 cents a pound in May. The contract hit a new low of 94.35 cents. It closed down in four of the past five trading days. In May, Robusta coffee closed down $13, or 0.9%, at $1495 a tonne, giving up some of the previous day's gains.

On the same day, new York cocoa futures in may closed down $59, or 2.7%, at $2143 a tonne, hitting an intraday low of $2137 since December 12.