As Brazil’s football team gains in the World Cup, one of the nation’s main commodity exports is suffering.
Coffee futures extended a slump to a 29-month low as Brazil’s real continued to slide against the dollar, boosting the appeal of export sales priced in the greenback.
Output in Brazil, the world’s top producer and shipper, will rise to a record this year. The drop in prices may benefit companies such as Starbucks (sbux), the world’s biggest coffee chain, and Nestle (nsrgy), which makes Nescafe and Nespresso.
On Monday, arabica coffee for September delivery fell 3% to close at $1.1165 a pound on ICE Futures U.S. in New York, the biggest drop for a most-active contract since Oct. 11. Earlier, the price touched $1.1155, the lowest since Jan. 20, 2016. The real dropped as much as 1% after tumbling 15% in the second quarter.
Coffee has slumped 19% since the end of 2016, while the real fell 17%.