Coffee Falls to Lowest Since January on Supply View; Sugar Rises
Robusta coffee fell in London to the lowest since January as bearish technical indicators added to speculation supplies are ample in Vietnam, the worlds biggest grower of the variety, and Indonesia. Sugar rose.
The 2013-14 harvest in Indonesia, the third-ranking robusta grower, started this month and will rise to 11 million 60- kilogram (132-pound) bags, according to estimates by Andrea Thompson, the Belfast, Northern Ireland-based head of research and analysis at CoffeeNetwork, a unit of broker INTL FCStone Inc. That compares with 10 million bags a year earlier.
Recent losses were primarily a technical move, purely because we have been confined in the $2,000 to $2,100-a-metric- ton range, but the market was unable to break up through the top, Thompson said by phone today. Fundamentally, what has been limiting the upside is ample supply.
Robusta futures for delivery in July retreated 0.5 percent to $1,975 a ton by 11:20 a.m. on NYSE Liffe in London. Prices touched $1,973, the lowest since Jan. 31. Arabica coffee futures for the same delivery month gained 0.1 percent to $1.3755 a pound on ICE Futures U.S. in New York.
Robusta fundamentals have turned more bearish recently, ADM Investor Services International said in a report dated April 19 and posted on its website yesterday. Rains arrived in Vietnam, which had faced dry conditions, and opinions have changed dramatically with some analysts now believing production could be a record.
Vietnams crop will be 25 million to 26 million bags in the 2012-13 season begun in October, according to CoffeeNetwork. That is down from 27 million bags a year earlier, Thompson said. The estimate might be revised depending on exports in the next few months, she said. Volcafe, a unit of commodities trader ED&F Man Holdings Ltd., in February estimated Vietnams crop at 26.5 million bags.
White, or refined, sugar for delivery in August added 0.6 percent to $501.50 a ton in London. Raw sugar for delivery in July rose 0.3 percent to 17.44 cents a pound in New York.
Cocoa for delivery in July declined 0.6 percent to 1,546 pounds ($2,388) a ton on NYSE Liffe. Cocoa for the same delivery month slid 0.3 percent to $2,354 a ton on ICE.