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Commodity Brokers – Orange-juice futures fell, heading for the biggest weekly drop since mid-August, as tests by the U.S. Food and Drug Administration for a banned fungicide in some domestic supplies indicated no health risk. Cotton rose.
The FDA said yesterday that nine of 14 samples contained carbendazim in concentrations of less than 80 parts per billion, a safety benchmark set by the government. The agency, which will conduct follow-up tests, said it “does not believe there is a need to continue” screening juice already in the U.S. A probe on imports still is under way. Futures headed for the first weekly decline since mid-December.
“A good chunk of the rally was because of this probe,” Jack Scoville, a vice president for Price Futures Group in Chicago, said in a telephone interview.
Orange-juice futures for March delivery declined 1.5 percent to $2.01 a pound at 9:58 a.m. on ICE Futures U.S. in New York. The price has dropped 4.7 percent this week. On Jan. 23, the commodity rose to a record $2.2695.
“If people think that the imports will be approved, we could possibly go back down first to the $1.87 area and then to between $1.70 to $1.75,” Scoville said.
On Jan. 9, the FDA said imports were being tested for carbendazim. Coca Cola Co., the maker of Minute Maid and Simply Orange, alerted authorities that it found trace levels in some samples from Brazil, the world’s biggest citrus producer and the supplier of 25 percent of the orange juice consumed in the U.S. in 2010.
“All indications are that the current levels of carbendazim found in products in the domestic marketplace do not pose any safety concerns,” Siobhan DeLancey, an FDA spokeswoman, said today in an e-mail.
Cotton futures for March delivery climbed 2.6 percent 96.62 cents a pound in New York. A close at that price would mark the biggest gain for a most-active contract since Jan. 17.
- Marvin G. Perez in New York at Bloomberg.