Robusta Coffee May Advance as Vietnamese Beans Near 7-Month High
Robusta coffee may climb for an ninth day in London, the longest winning streak since February, after prices for the beans in top grower Vietnam approached the highest level in almost seven months. Sugar climbed.
Vietnamese coffee rose to 41,800 dong ($2.01) a kilogram (2.2 pounds) yesterday, the highest since Oct. 25, according to data on Bloomberg. Supplies from Brazil and Indonesia, the second and third-biggest robusta producers, are selling at a premium to NYSE Liffe, reducing the incentive for exporters to deliver beans to the exchange, data from Volcafe, the coffee unit of ED&F Man Holdings Ltd. and broker Flavour Coffee show.
“There has been such a strong move up in recent weeks that it would be logical that there will be some sort of retracement in the coming days, though it would take an element of bravery to stand in robusta’s way,” London-based broker Sucden Financial Ltd. said in a report e-mailed yesterday.
Robusta coffee for July delivery was unchanged at $2,189 a metric ton by 10:24 a.m. on NYSE Liffe in London. The price touched $2,220 a ton, the highest since Sept. 8. Arabica coffee for July delivery slid 0.2 percent to $1.776 a pound on ICE Futures U.S. in New York.
“There has also been an increase of the July open interest showing fresh positions being added, seeming to have bolstered to the push in this rally,” Sucden Financial said in the report.
Robusta coffee for July delivery is $23 a ton more expensive than the September futures, reversing a discount last week, data on Bloomberg show. That market structure is known as backwardation and may signal limited supplies.
Robusta coffee has risen on speculation demand will keep growing. Global coffee demand will rise by about 2 percent in 2011-12, according to London-based broker Marex Spectron Group. All of the growth will come from robusta beans as consumption expands in emerging markets, notably in Asia and South America, the broker said. Prices may reach $2,236 a ton by the end of May, a Bloomberg survey published on March 26 showed.
White, or refined, sugar for August delivery was up 0.3 percent to $578.20 a ton on NYSE Liffe. Raw sugar for July delivery advanced 0.3 percent to 20.79 cents on ICE.
Cocoa for July delivery fell 0.1 percent to 1,539 pounds ($2,447) a ton in London. Cocoa for July delivery was down 0.4 percent to $2,283 a ton in New York.
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.