Robusta Coffee Rebounds Amid Vietnam Drought; Sugar Gains
Robusta coffee rebounded in London on speculation prices that fell for three consecutive sessions dropped too far amid a drought that may cut output in Vietnam, the world’s largest producer of the variety. Sugar gained.
Robusta coffee futures fell to $2,152 a metric ton yesterday as rain fell over growing areas in Vietnam. That was the lowest close for a most active contract since March 6. Showers and thunderstorms will be scattered across the country through tomorrow, bringing 0.1-0.4 inch of rain, according to forecaster AccuWeather. Dry weather in Vietnam earlier this year may cut output next season by as much as 30 percent to 1 million tons, according to the median of eight trader and shipper estimates compiled by Bloomberg.
“There were some small rains in the coffee areas,” Nguyen Chi Cuong, chief executive officer at trading company NC Group Ltd., which has offices in Ho Chi Minh City, Vietnam, said in an e-mail today, adding that the “threat of drought” was still there. The “domestic price eased off a little bit.”
Robusta coffee for delivery in May gained 0.7 percent to $2,167 a ton by 10:39 a.m. on NYSE Liffe in London. Arabica coffee for delivery in May slid 0.3 percent to $1.332 a pound on ICE Futures U.S. in New York.
Drought in the central region of Vietnam covering five coffee-growing provinces, including top producer Dak Lak, will continue and may become more severe, the National Center for Hydro-Meteorological Forecasting said March 5.
Coffee prices in Vietnam fell to 43,900 dong ($2.10) a kilogram (2.2 pounds) yesterday, data from the Daklak Trade & Tourism Center on Bloomberg showed. That is down from 45,500 dong on March 11, which was the highest since September 2011, the data showed.
White sugar for May delivery was up 0.3 percent to $532.20 a ton on NYSE Liffe. Raw sugar for May delivery gained 0.5 percent to 18.45 cents a pound on ICE.
Cocoa for May delivery rose 0.2 percent to 1,449 pounds ($2,200) a ton in London. Cocoa for May delivery advanced 0.3 percent to $2,159 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.