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Robusta Coffee Gains as Investors May Be Buying; Cocoa Retreats

Robusta coffee extended gains in London, rising for a sixth day, on speculation investors are increasing bets on higher prices at a time when farmers in top- grower Vietnam are in no rush to sell. Cocoa slid.

Money managers boosted bets on rising prices of robusta coffee by more than fourfold in the week ended Dec. 31, data from the NYSE Liffe exchange showed. Net-long positions rose to 3,805 futures and options from 905 contracts a week earlier. Farmers in Vietnam have sold about a third of the crop, Volcafe, the coffee unit of commodities trader ED&F Man Holdings Ltd., said on Jan. 4. They usually sell 50 percent before Tet, the country’s Lunar New Year, starts on Feb. 10.

“There is no sales pressure at all at the peak of harvest,” Nguyen Chi Cuong, chief executive officer at trading company NC Group Ltd., which has offices in Ho Chi Minh City, Vietnam, said in an e-mail yesterday.

Robusta coffee for March delivery advanced 0.3 percent to $1,968 a metric ton by 10:42 a.m. on NYSE Liffe in London. The price touched $1,974 yesterday, the highest since Nov. 13. Arabica coffee for March delivery slid 0.8 percent to $1.4915 a pound on ICE Futures U.S. in New York.

“We have achieved levels last seen back in mid-November and each time we test higher one begins to feel that a better test towards $2,000 a ton should be a real possibility soon,” Sucden Financial Ltd. in London, said in a report e-mailed yesterday.

Global coffee production will exceed demand by 6.9 million bags in 2012-13, the most in four years, CoffeeNetwork, a unit of INTL FCStone Inc. estimated yesterday. While the arabica surplus will amount to 5.6 million bags, excess supplies of robusta beans will be 1.3 million bags, according to Andrea Thompson, the company’s Belfast, Northern Ireland-based head of research and analysis. A bag of coffee weighs 132 pounds.

White sugar for March delivery was little changed at $510.50 a ton in London. Raw sugar for March delivery gained 0.2 percent to 18.90 cents a pound in New York.

Cocoa for March delivery was down 0.2 percent to 1,438 pounds ($2,313) a ton on NYSE Liffe. Cocoa for March delivery retreated 0.2 percent to $2,263 a ton on ICE.

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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