Robusta Coffee Falls Before Record Vietnamese Crop; Cocoa Rises
Robusta coffee fell for a second day in London in anticipation of a record crop in Vietnam, the world’s biggest producer of the variety. Cocoa gained in U.K. trading on speculation processing data will signal more demand.
Vietnam will harvest a record 29 million bags of coffee in the season started this month, forecasts Macquarie Group Ltd. ED&F Man Holdings Ltd.’s Volcafe unit projected a 30 million-bag crop in August and raw-materials trader Olam International Ltd. (OLAM) expects 28 million bags. Prices are falling after rallying 6.1 percent last week, the biggest gain since February 2012 for a most-active contract.
“Momentum from the recent sharp rally continues to fade,” Sterling Smith, a futures specialist at Citigroup Inc. in Chicago, said in a report e-mailed yesterday. “Fresh Vietnamese beans from the latest harvest should be making their way into the market shortly.”
Robusta coffee for delivery in November dropped 0.2 percent to $1,692 a metric ton by 10:19 a.m. on NYSE Liffe in London. Arabica coffee for delivery in December slid 0.2 percent to $1.148 a pound on ICE Futures U.S. in New York.
Robusta prices rallied as stockpiles monitored by NYSE Liffe fell 19 percent in the two weeks to Sept. 30 to 60,380 tons. That’s below the 75,000-ton limit on deliveries to a single trader. Roasters are tapping inventories as beans trade at a premium to futures in the physical market.
“Premiums are quite wide at $120 over the board,” Smith said, referring to the exchange. “However, little business is seen being done as buyers are holding out for new crop.”
Robusta for delivery in November traded at a $21-a-ton premium to the March contract, up from $12 a week ago and reversing a discount two weeks earlier. Higher prices for earlier deliveries, known as backwardation, may signal limited supplies for now.
Cocoa for delivery in December added 0.3 percent to 1,759 pounds ($2,809) a ton on NYSE Liffe. Cocoa for the same delivery month slipped 0.1 percent to $2,714 a ton on ICE, erasing a climb as high as $2,733. Third-quarter processing figures for Europe and North America will be published this month.
“Most analysts expect that they will reveal an increase,” the International Cocoa Organization in London said of the data in a report e-mailed yesterday. “The anticipated recovery in most developed economies stimulated demand for cocoa products, especially butter.”
Refined, or white, sugar for delivery in December fell 0.1 percent to $496.70 a ton in London. Raw sugar for delivery in March tumbled 0.7 percent to 18.49 cents a pound in New York.
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