Arabica Coffee Gains as Roasters May Switch Blends; Sugar Rises
Arabica coffee climbed for the first time in eight trading sessions in New York on speculation roasters may add more of the beans favored by Starbucks Corp. (SBUX) to blends. Sugar and cocoa in the city also rose.
Arabica futures touched $1.3255 a pound yesterday, the lowest since June 2010. The commodity lost 37 percent last year, making it the worst performer in the Standard & Poor’s GSCI gauge of 24 raw materials. Robusta beans, used in instant coffee, climbed 12 percent this year after advancing 6.3 percent in 2012. The premium arabica commands over robusta slid to 35.4 cents a pound yesterday, the lowest since December 2008. That may attract roasters to arabica beans.
“It has been a steady grind lower for New York the last couple of weeks,” Keith Flury an analyst at Rabobank International in London, said by e-mail today. “The early bounce today may rest on concerns the selloff may be overdone. We are at that $1.33 a pound level we were at before the 2010 rally. That level has offered support in the past and also now.”
Arabica coffee for delivery in May rose 0.6 percent to $1.3385 a pound by 8:17 a.m. on ICE Futures U.S. in New York. Robusta coffee for delivery in May fell 0.3 percent to $2,148 a metric ton on NYSE Liffe in London.
Arabica’s premium over robusta will need to stay at 35 cents to 40 cents for one or two quarters before roasters make significant changes to blends, said Rodrigo Costa, director of trading at Caturra Coffee Corp. in Elmsford, New York.
Robusta futures fell for a third day as rain is forecast in Vietnam, the world’s largest producer of the variety. Showers and thunderstorms will be scattered across the country today, according to weather forecaster AccuWeather.
Raw sugar for May delivery gained 0.8 percent to 18.46 cents a pound on ICE. White sugar for May delivery was up 0.4 percent to $532 a ton on NYSE Liffe.
Above-average rainfall in the second quarter is set to disrupt harvesting of the sugar cane crop in Brazil’s center south, the country’s main growing region, according to Somar Meteorologia. Rain may be about 30 percent above the historical average from April to June, according to Celso Oliveira, a meteorologist at the Sao Paulo-based weather forecaster.
Cocoa for May delivery advanced 1.5 percent to $2,130 a ton in New York. Cocoa for May delivery rose 1.1 percent to 1,433 pounds ($2,169) a ton in London.
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.