Feb. 2 (Bloomberg) -- Coffee futures rebounded on speculation that a slump to a 13-month low was overdone, and a smaller crop in Colombia signaled lower supplies of arabica beans. Sugar fell, capping the longest slump in six months.
Coffee prices tumbled 9.2 percent in the two months ended Jan. 31 amid signs of ample supplies from Brazil, the world’s top grower, and Vietnam. The National Federation of Coffee Growers in Colombia, the second-biggest producer of arabica, said in January that output trailed its 2011 target as the harvest fell 12 percent.
“The market is oversold,” James Cordier, the founder of Optionsellers.com in Tampa, Florida, said in a telephone interview. “While it’s true that output in Brazil and Vietnam will be higher this year, Colombia’s crop has not recovered from the levels of a few years ago. The higher-valued arabicas are going to be tight.”
Arabica coffee for March delivery rose 0.7 percent to settle at $2.156 a pound at 2 p.m. on ICE Futures U.S. Earlier, the price touched $2.1095, the lowest for a most-active contract since Dec. 13, 2010.
Futures may rebound to $2.20 to $2.25 in the next week or two as traders unwind bets on a decline, Hernando de la Roche, the director of futures at INTL FCStone in Miami, said in a telephone interview.
Vietnam is the top producer of robusta beans, used mainly in instant coffee. Arabica, grown mostly in Latin America, is brewed by specialty companies including Starbucks Corp.
In London, robusta-coffee futures for March delivery fell 1 percent to $1,800 a metric ton on NYSE Liffe. The price dropped for the sixth straight session, the longest slump since early September.
Raw-sugar futures for March delivery declined 0.5 percent to 23.48 cents a pound in New York. The price fell for the fifth straight session, the longest slide since early August.
Cocoa futures for March delivery were unchanged at $2,225 a ton on ICE.
In London, refined sugar and cocoa gained.
--Editors: Patrick McKiernan, Thomas Galatola
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