Robusta Coffee Advances on Speculation About Supply of Beans

Robusta Coffee Advances on Speculation About Supply of Beans
By Tony C. Dreibus – January 6, 2011 06:27 EST
 

Jan. 6 (Bloomberg) — Robusta coffee gained in London for the first time in three sessions on speculation higher-quality beans are in short supply and after prices yesterday dropped the most in six weeks.

The coffee crop in Vietnam, the world’s biggest robusta producer, may be smaller this year as dry weather cuts the size of the beans, industry executives said last week. Late rains during harvest delayed collection of coffee in Vietnam. Robusta yesterday slid 3.2 percent, the most since Nov. 22.

“People are looking at the lower quality of beans right now,” said Connor Noonan, an analyst at Castlestone Management Ltd. in London. “The people who are looking for the physical are not getting the best they are hoping for, so a lot are saying, ‘I’d be willing to pay more for higher-quality beans.’ Underlying fundamentals are pretty positive.”

Robusta for March delivery gained $11, or 0.5 percent, to $2,016 a metric ton at 11:09 a.m. on NYSE Liffe in London. Arabica coffee for March delivery rose 2.3 cents, or 1 percent, to $2.353 a pound on ICE Futures U.S. in New York.

White, or refined, sugar for March delivery slumped 0.4 percent to $773.10 a ton on NYSE Liffe. Raw sugar for March delivery fell 1.1 percent to 31.83 cents a pound in New York.

Cocoa for March delivery gained 0.6 percent to $2,868 a ton in New York. Cocoa for March delivery rose 0.6 percent to 1,945 pounds ($3,009) a ton in London.

Cotton for March delivery added 2.1 percent to $1.483 a pound, the third straight increase, in New York.