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Coffee Prices Fall From 13-Year High; Sugar Futures Rise; Cocoa Declines
Coffee futures declined on bets that a rally to a 13-year high was overdone. Sugar jumped to a six- month peak, and cocoa fell.
Arabica coffee yesterday reached $1.9865 a pound, the highest level since August 1997, on slumping inventories and speculation that excessive rain would harm crops in Brazil and Colombia, the world’s biggest producers. Output in Brazil will rise more than forecast in 2010, the government said today.
“There’s likely to be a retracement from the high we have seen as the supply of better-quality coffee increases,” said Doug Whitehead, an analyst at Rabobank International in London.
Arabica coffee for December delivery fell 3.85 cents, or 2 percent, to close at $1.907 a pound at 2 p.m. on ICE Futures U.S. in New York, the biggest drop since Aug. 24. The most- active contract has gained 40 percent this year.
Growers in Brazil will harvest 47.2 million bags this year, the Agriculture Ministry’s crop-forecasting agency, known as Conab, said in report today. The projection in early May was 47 million bags.
The nation produced 39.5 million bags last year. A bag of coffee weighs 60 kilograms (132 pounds).
Robusta-coffee futures for November delivery declined $44, or 2.7 percent to $1,591 a metric ton on NYSE Liffe in London.
Brazil Shipping Delay
Raw-sugar futures for October delivery gained 1.05 cents, or 4.9 percent, to close at 22.43 cents a pound in New York, the biggest gain since June 30. Earlier, the price jumped to 22.67 cents, the highest level since March 3.
Refined-sugar futures for December delivery advanced $10.20, or 1.8 percent, to $569.30 a ton in London.
Shipments from Brazil’s leading ports have been disrupted by heavy rains, creating a backlog of vessels. Ships will wait a record 29 days before loading this month at the largest port, Nicolle Alves de Castro, a commercial associate at research firm Santos Associados Consultoria Ltda, said today.
The previous record was 20 days in October 2009.
“The port issue is a big thing, and countries who need sugar should pray for good weather,” said Ricardo Scaff, a trader at Rabobank International in New York. “The market is tight as there are very few places where it is available.”
Cocoa futures for December delivery fell $42, or 1.5 percent to $2,694 a ton in New York.
In London, cocoa futures for December delivery fell 31 pounds, or 1.6 percent, to 1,876 pounds ($2,895) a ton. Earlier, the price touched 1,869 pounds, the lowest level since Sept. 8, 2009.
“For the short term at least, the more bearishly inclined have the upper hand, partly driven by a flow of news stories and comments forecasting a much better 2010-2011 crop out of Ivory Coast,” ABN Amro Bank NV and VM Group said in their August 2010 report.
The Ivory Coast will produce 1.3 million tons in the season starting Oct. 1, up from 1.195 million a year earlier, and Ghana’s crop may jump to 745,000 tons from 713,000 tons, according to ABN Amro Bank and VM Group estimates from a July 30 report.
The Ivory Coast is the top producer, followed by Ghana.
To contact the reporters on this story: Chris Kay in London at ckay5@bloomberg.net; Debarati Roy in New York at droy5@bloomberg.net
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