Coffee Declines Most Since November on Speculation Prices Climbed Too High

Robusta coffee fell the most in almost eight months in London on speculation prices climbed too high in recent weeks to reflect the supply-and-demand outlook.

Robusta for September delivery slid as much as 3.9 percent, the most since Nov. 10, on Liffe. The beans jumped more than a quarter in the four weeks through June 25, as did the milder arabica variety traded on ICE Futures U.S. in New York.

“On the way up, there was a lot of panic buying and short- covering,” Angus Kerr, owner of trading company Coffee ag in Cobham, England, said by phone, referring to buying of beans to close bets on lower prices. “The market has further to come down before it consolidates,” he said.

September-delivery robusta dropped $36, or 2.1 percent, to $1,674 a metric ton at 10:21 a.m. London time. Arabica for September delivery declined 1.3 percent to $1.622 a pound on ICE Futures U.S.

Traders yesterday exchanged 500 lots of September $1,700 robusta call options on Liffe, according to data from the bourse. They also exchanged 725 lots of September $1,700 put options and 225 lots of $1,750 puts. Calls give the right to buy a commodity at a preset price, while puts confer the right to sell.

White, or refined, sugar for October delivery slid $3.40, or 0.7 percent, to $499 a ton on Liffe. Raw sugar for October delivery rose 1.1 percent to 16.88 cents a pound in New York.

Cocoa for September delivery was unchanged at 2,400 pounds ($3,641) a ton on Liffe. In New York, cocoa for September delivery gained $28, or 0.9 percent, to $2,999 a ton.

To contact the reporter on this story: M. Shankar in London at mshankar@bloomberg.net

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