Robusta Coffee Falls as Prices Climbed Too Far; Sugar Advances

Robusta coffee fell for a second day in London on speculation prices that gained 3.1 percent last week climbed too much amid rising exchange stockpiles. White sugar advanced.

Robusta coffee stockpiles with a valid grading certificate in warehouses monitored by NYSE Liffe were 125,820 metric tons on March 4, up 11 percent from two weeks earlier, exchange data showed. Inventories are rising even as exports from Vietnam, the world’s largest producer, dropped 54 percent last month from January, according to the General Customs Department. Robusta coffee gained 13 percent this year on advancing demand and as dry weather threatens to cut output in Vietnam.

“Vietnamese exports were sharply lower in February; however they were within market expectations,” Sterling Smith, a futures specialist at Citigroup Global Markets Inc. in Chicago, said in a report e-mailed yesterday. “On a near-term basis the market is overbought and we should expect some degree of corrective action as the long side should be more inclined to book profits due to the rather rapid run up in prices.”

Robusta coffee for delivery in May was down 1 percent at $2,181 a ton by 10:29 a.m. on NYSE Liffe in London. It fell 0.1 percent yesterday. Arabica coffee for delivery in May declined 0.2 percent to $1.403 a pound on ICE Futures U.S. in New York.

The coffee crop in Vietnam may decline 30 percent in the 2013-14 season starting Oct. 1, Luong Van Tu, chairman of the Vietnam Coffee & Cocoa Association, or Vicofa, said on March 10, without giving a forecast. Drought in the central region covering five coffee-growing provinces, including Dak Lak, will continue and may become more severe, the National Center for Hydro-Meteorological Forecasting said on its website March 5.

Arabica’s coffee premium over robusta fell to 40.67 cents a pound yesterday, the lowest in four years. It was at 41.19 cents a pound today. Inventories of arabica beans in warehouses monitored by ICE reached 2.73 million bags yesterday, the highest since March 8, 2010.

Cocoa for May delivery dropped 0.2 percent to 1,458 pounds ($2,178) a ton in London. Cocoa for May delivery fell 0.3 percent to $2,141 a ton in New York.

White sugar for May delivery was up 0.3 percent to $535.40 a ton on NYSE Liffe. Raw sugar for May delivery was little changed at 18.79 cents a pound 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: John Deane at jdeane3@bloomberg.net

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