Coffee Surges to 12-Year High in New York as South America Supply Tightens
Coffee prices extended gains in New York, surging to the highest level in more than 12 years, on concern that output in South America will be limited.
Coffee climbed 6.1 percent last week on speculation that too much rain will hurt crops in Brazil and Colombia, the world’s largest producers of arabica beans. Speculative long positions, or bets prices will rise, outnumbered short positions by 42,616 contracts on ICE Futures U.S. in the week ended Aug. 10, according to government data.
“The short-term supply concerns remain,” said Hector Galvan, a senior trading adviser at RJO Futures in Chicago. “There is a lot of speculative buying.”
Arabica coffee for December delivery rose 5.2 cents, or 2.9 percent, to settle at $1.8505 a pound at 2 p.m. on ICE Futures U.S. in New York. Earlier, the price reached $1.865, the highest level for a most-active contract since December 1997.
The commodity gained 4.2 percent this week to notch its third weekly gain in four and raise its advance to 36 percent this year.
The price jump over the last month “indicates some uncertainty relating to short-term supply problems,” Nestor Osorio, the executive director of the International Coffee Organization, said last week.
On the Liffe exchange in London, robusta-coffee futures for November delivery added $40, or 2.3 percent, to $1,791 a metric ton, rising for the second straight week.
Arabica coffee is grown mainly in Latin America and brewed by specialty companies including Starbucks Corp. Robusta beans, used in instant coffee, are harvested mostly in Asia and parts of Africa.
To contact the reporters on this story: Debarati Roy in New York at droy5@bloomberg.net
Rate this Page