Coffee Gains on Stockpiles Before Options Expiry; Sugar Retreats

Robusta coffee gained for a second day in London, before the expiry of the January options contract later today, as demand continues to be strong and stockpiles are set to keep on falling. Sugar retreated.

Robusta coffee inventories with a valid grading certificate in warehouses monitored by NYSE Liffe were 105,140 metric tons on Dec. 10, down 3.1 percent from two weeks earlier, according to data on the exchange’s website. Stockpiles have fallen 75 percent since reaching an all-time high of 417,420 tons in July 2011. The January robusta options contract expires today, with investors holding 4,932 contracts giving them the right to sell the futures at $1,900 a ton, the most active January put-option, and 1,914 contracts giving them the right to buy at this level.

“There has been industry buying at the $1,830 to $1,840 a ton level,” Andrea Thompson, the Belfast, Northern Ireland- based head of research and analysis at CoffeeNetwork, a unit of broker INTL FCStone Inc., said by phone today. “The slight support you have been seeing in the past few weeks is due to the underlying fundamentals, with falling stockpiles.”

Robusta coffee for March delivery advanced 0.4 percent to $1,849 a ton by 10:30 a.m. on NYSE Liffe in London, still 2.2 percent higher this year. The January futures were trading at $1,854 a ton. Arabica coffee for March delivery was up 0.5 percent to $1.4465 a pound in New York. It’s fallen 36 percent this year.

“All the indications are that the inventories will fall again 300 to 500 lots,” Thompson said, commenting on exchange- monitored beans. That corresponds to 3,000 tons to 5,000 tons. NYSE Liffe is set to update the figures again next week.

White, or refined, sugar for March delivery slid 0.1 percent to $520.50 a ton in London. It fell 14 percent this year. Raw sugar for March delivery fell 0.2 percent to 19.36 cents a pound in New York, losing 17 percent this year.

Cocoa for March delivery fell 0.2 percent to 1,508 pounds ($2,457) a ton on NYSE Liffe, and earlier today reached 1,506 pounds, the lowest since July 18. It’s still up 9.3 percent this year. Cocoa for March delivery was little changed at $2,399 a ton on ICE. It gained 14 percent this year.

To contact the reporter on this story: Isis Almeida in London at Ialmeida3@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at Ccarpenter2@bloomberg.net.

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