Coffee Falls Most in Week as U.S. Financial Rescue Plan Stalls

By Shruti Date Singh

Sept. 26 (Bloomberg) -- Coffee fell the most in more than a week in New York on concern the global economy will keep slowing if the U.S. Congress doesn't pass the proposed $700 billion financial bailout plan.

House Republicans haven't accepted Treasury Secretary Henry Paulson's plan to deal with the U.S. credit crisis. The uncertainty is hurting most commodities, said Lars Steffensen, managing director of commodity trading at Ebullio Capital Management in Southend-on-Sea, U.K. The Reuters/Jefferies CRB Index of 19 raw materials fell for the third time in five days, with coffee dropping the most among the agricultural futures.

``The thinking was that the U.S. bailout was going to give us a new economic foundation,'' Steffensen said. ``With it breaking down, I think people are saying, `Ooh, we should scale back a bit.' In coffee there are no big fundamentals driving the price. The price is purely on the macros news.''

Arabica coffee futures for December delivery declined 1.8 cents, or 1.3 percent, to $1.358 a pound at 9:51 a.m. on ICE Futures U.S. in New York. A close at that price would be the biggest drop for a most-active contract since Sept. 18.

In London, robusta coffee futures for January delivery fell $23, or 1.1 percent, to $2,156 a metric ton on the Liffe exchange.

To contact the reporter on this story: Shruti Date Singh in Chicago at ssingh28@bloomberg.net.