Jan. 28 (Bloomberg) -- Coffee rose the most in more than two weeks on speculation that demand is rising as incomes in China increase and a drop in the dollar makes the commodity cheaper for buyers using other currencies.

Dunkin' Brands Inc., the owner of the Dunkin' Donuts chain, said last week it plans to open 1,000 stores in China in the next decade, joining the expansion of coffee retailers such as Starbucks Corp. in Asia. Global coffee production will be ``just sufficient'' in the year to October 2009, offering little prospect that record-low stockpiles will expand, the International Coffee Organization said last week.

``We're expecting to see the lowest stocks in years and that will eventually cause prices to go up substantially,'' said A.C. Wheeler, branch manager for Edgemoore Financial Management in Valencia, California. ``Coffee production is strong. Usage is stronger.''

Coffee futures for March delivery added 2.75 cents, or 2.1 percent, to $1.342 a pound on ICE Futures U.S., formerly known as the New York Board of Trade. It was the biggest jump since Jan. 8. Coffee last week dropped for a second-straight week, after rising 7.9 percent in 2007.

Dunkin' Chairman Jon Luther said in Shanghai this weekend that the company, which closed its seven China Dunkin' Donuts stores in 2000, plans to open as many as 1,000 shops in the next decade in Shanghai, Beijing and other eastern cities. Starbucks Chairman Howard Schultz has called China his company's ``most important strategic growth market.''

Coffee in warehouses monitored by ICE has slipped more than 2 percent from the end of last year to 4.38 million bags as of Jan. 24. A bag of coffee weighs 132 pounds (60 kilograms).

The U.S. Dollar Index, which includes the euro, pound, yen and three other major currencies, dropped as much as 0.7 percent on speculation the Federal Reserve will trim interest rates.

To contact the reporter on this story: Ron Day in New York at rday1@bloomberg.net.

Last Updated: January 28, 2008 15:19 EST