Coffee Rises on Speculation Prices Fell Too Far; Sugar Retreats

Arabica coffee rebounded in New York on speculation prices that fell 2.6 percent yesterday retreated too far amid concern about declining output in Latin American countries. Sugar slid.

Coffee output in Central America and Mexico, which account for about 14 percent of global production, may tumble as a disease affecting foliage spreads. Guatemala, the region’s second-biggest grower, may lose a third of its crop because of leaf rust, President Otto Perez Molina said yesterday in Davos, Switzerland. The crop in Costa Rica may be 30 percent to 40 percent smaller because of the fungus, President Laura Chinchilla said in a separate interview.

“Surprisingly, reports that many coffee plantations in Central America are under attack by the roya fungus are currently being all but ignored, though they should put paid to any further price slide,” Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt, said in a report e-mailed today.

Arabica coffee for March delivery was 0.9 percent higher at $1.478 a pound by 8:06 a.m. on ICE Futures U.S. in New York. Robusta coffee for March delivery was little changed at $1,945 a ton in London, paring earlier losses of as much as 0.9 percent.

Sliding output in Central America may be compensated by a large crop in Brazil, the world’s biggest producer, Commerzbank’s Fritsch said. Brazil may produce between 47 million and 50.2 million bags in the 2013-14 season, a record for a year in which trees enter the lower-yielding half of a two-year cycle, the government estimates.

Bean Stockpiles

Robusta coffee fell in London earlier today after bean stockpiles climbed. Inventories with a valid grading certificate in warehouses monitored by NYSE Liffe rose 0.6 percent to 105,530 tons as of Jan. 21 from two weeks earlier, according to the exchange. Traders had expected a “small draw,” broker Sucden Financial Ltd. in London said in a report e-mailed yesterday.

Cocoa for March delivery gained 0.2 percent to $2,200 a ton on ICE. Cocoa for March delivery fell 0.1 percent at 1,436 pounds ($2,270) a ton on NYSE Liffe.

Global cocoa stockpiles rose by 138,000 tons in the past marketing year, the International Cocoa Organization said. The inventories were 1.838 million tons by Sept. 30, Laurent Pipitone, head of the economics and statistics unit at the ICCO, said by phone from London today after the group’s meeting about the reserves.

Raw sugar for March delivery was 0.6 percent lower at 18.37 cents a pound in New York. White, or refined, sugar for March delivery fell 0.3 percent to $485.60 a ton in London.

Before it's here, it's on the Bloomberg Terminal.