Vietnam Exports Drive Robusta Coffee Bearish Bets to 6-Week Low

Dec. 2 (Bloomberg) -- Declining coffee exports from Vietnam, the world’s largest producer of the robusta variety used in instant drinks, drove bearish bets on the beans traded in London to a six-week low, NYSE Liffe data showed.

Money managers reduced their net-short, or bets on lower prices, by 24 percent to 6,491 futures and options in the week ended Nov. 26, according to the Commitment of Traders report on the exchange’s website today. That was the smallest bearish wager since Oct. 15 and compares with 8,490 contracts a week earlier. The beans gained 2.6 percent in the latest week.

Vietnamese coffee exports were estimated at 80,000 tons last month, against 122,000 tons a year earlier, according to data from the General Statistics Office in Hanoi. Robusta stockpiles in warehouses tracked by NYSE Liffe were the lowest since at least 2002 as of Nov. 25, data on Bloomberg showed.

“Liffe futures show technical strength after having climbed 11 percent in 30 days and that could mean more purchases from funds,” Rodrigo Costa, a trading director at Caturra Coffee Corp., wrote in a report e-mailed today for Archer Consulting, where he is a contributor. He added that producers in Vietnam are “waiting for better prices” to sell beans.

Robusta coffee, down 14 percent this year, rallied 11 percent in November, the biggest monthly gain since 2011. Supplies of the variety will be 2.4 million bags bigger than demand in the 2013-14 season started Oct. 1 in most countries, estimates Macquarie Group Ltd. That compares with a surplus of 6.4 million bags for the arabica variety, favored for specialty drinks such as those made by Starbucks Corp., the bank said. A bag weighs 60 kilograms (132 pounds).

Chocolate

In cocoa, money managers boosted bullish bets to a record, exchange data compiled by Bloomberg showed. The net-long position was 69,117 futures and options as of Nov. 26, up from 68,949 contracts a week earlier. The beans used to make chocolate slid 1.3 percent in the period.

Cocoa supplies will fall short of demand by 162,000 tons in 2013-14, according to KnowledgeCharts, a unit of Commodities Risk Analysis, in Bethlehem, Pennsylvania. That follows a 198,000-ton deficit a year earlier, the data showed.

Investors raised bets on higher white, or refined, sugar prices to 8,467 futures and options, NYSE Liffe data showed. That compares with 8,338 contracts a week earlier. The sweetener slid 1.6 percent in the period.

In feed wheat, money managers were net-short by 159 contracts, unchanged from a week earlier. The grain rose 0.2 percent in the period.

To contact the reporter on this story: Isis Almeida in London at ialmeida3@bloomberg.net