New York Banks including Goldman Sachs and Citi have slashed their forecasts for coffee and sugar prices by as much as 31 percent in the past month as the value of Brazil’s real currency slumped to its lowest in 12 years. With sugar prices now languishing near the lowest levels in more than six years below 13 cents per lb, six banks are now forecasting an average of second-quarter prices of around 13.6 cents per lb, down about three cents from earlier forecasts, according to the data. Rabobank’s forecast was the most bearish at 12.5 cents. In arabica coffee, the average estimate fell to $1.52 per lb from $1.90, the data show. Citi cut its second quarter forecast by 31 percent, the most of any bank surveyed, but still held the most bullish third-quarter forecast at $1.75 per lb. A leading cause of the downward revision has been the tumbling real in Brazil, the world’s biggest producer of both commodities.
