Robusta coffee rose to the highest in more than five months in London amid lack of selling during a holiday in Vietnam and after the arabica variety in New York surged the most since 2004. Sugar was little changed.
Vietnam, the top producer of the robusta variety used in instant coffee, is currently celebrating Tet, the festival that marks the Lunar New Year, reducing selling pressure on prices. Arabica coffee, favored for specialty drinks such as those made by Starbucks Corp., jumped 8.6 percent in New York yesterday, the biggest gain since November 2004. Dry, hot weather in Brazil, the biggest arabica grower, threatens to cut output.
“The Tet holiday in Vietnam has probably kept much pent-up selling out of the market, but this is sure to find its way in soon,” ABN Amro Clearing Bank NV said in a report e-mailed today. Arabica gained “additional support from the underlying fundamental story of the hot, dry weather in Brazil.”
Robusta coffee for delivery in May advanced 2 percent to $1,875 a metric ton by 10:15 a.m. on NYSE Liffe in London. The price climbed as much as 2.4 percent to $1,883 a ton, the highest for a most-active contract since Aug. 20.
In New York, arabica coffee for delivery in March rose 1.1 percent to $1.374 a pound on ICE Futures U.S. The price touched $1.379 a pound, the highest for a most-active contract since May 17. Futures trading volumes were about four times the average for this time of day, data compiled by Bloomberg show.
Coffee surged 24 percent this year in New York, making it the best performing commodity in the Standard & Poor’s GSCI gauge of 24 raw materials. Brazil had the hottest January ever recorded and the least rain for the period in 20 years, according to Marco Antonio dos Santos, an agronomist at Sao Paulo-based Somar Meteorologia. Dry weather will persist through Feb. 20 in the southeast, the main growing region, Celso Oliveira, a meteorologist at Somar, said yesterday.
“In the current mood, few would sell short right now,” ABN Amro said, commenting on arabica. “Origin did sell into the rally but were just blown away by the aggressive buying.”
Dry weather also threatens to reduce sugar cane yields in Brazil’s center south, the main growing region of the world’s top producer. Growers in the area this year will probably harvest less than the record 594 million tons collected in 2013, according to Usina Alta Mogiana SA. Cuts to output, currently estimated at about 5 percent, may be bigger if dry weather persists, Marcos Mine, a risk manager at the miller in Sao Joaquim da Barra in Sao Paulo state, said yesterday.
White, or refined, sugar for delivery in March rose 0.1 percent $427.30 a ton on NYSE Liffe. Raw sugar for the same month was little changed at 15.75 cents a pound on ICE.
India, the world’s second-biggest sugar producer, will decide today on subsidies that may help millers boost exports of raw sugar, Farm Minister Sharad Pawar said in New Delhi.
Cocoa for delivery in March fell 0.5 percent to 1,852 pounds ($3,026) a ton in London. In New York, cocoa for delivery in the same month dropped 0.3 percent to $2,906 a ton.
Bean arrivals in Ivory Coast, the world’s largest producer, were estimated at 1.047 million tons from the start of the season in Oct. 1 through Feb. 2, according to data on website of KnowledgeCharts, a unit of Commodities Risk Analysis in Bethlehem, Pennsylvania. That’s 18 percent higher than a year earlier and represents the biggest deliveries since at least the 2004-05 season, the data showed.