Bloomberg News

Coffee Drops Most in Week on Higher Supplies; Sugar, Cocoa Gain

February 22, 2012

Feb. 22 (Bloomberg) -- Arabica-coffee futures fell the most in a week as stockpiles climbed and producers sought to increase sales in Brazil, the world’s top grower. Sugar and cocoa rose.

Coffee inventories monitored by ICE Futures U.S. have jumped 24 percent since the end of October, exchange data show. As of Feb. 17, Brazil’s permits for exports this month surged 26 percent from January, the nation’s Council of Coffee Exporters, known as Cecafe, said on its website. Markets in the country were closed on Feb. 20 and 21 for the Carnival festival.

“Brazilian sellers are back in the market,” Hernando de la Roche, the director of futures at INTL FCStone in Miami, said in a telephone interview. “Stocks are also rising.”

On ICE, arabica-coffee futures for May delivery declined 2 percent to settle at $2.0185 a pound at 2 p.m., the biggest drop since Feb. 14. The price has tumbled 11 percent this year.

Raw-sugar futures for May delivery rose 1 percent to 24.71 cents a pound in New York. The sweetener has gained 6.1 percent in 2012, after plunging 27 percent last year.

As of Feb. 1, sugar output in Brazil’s Center South, the world’s largest growing-region, fell 6.8 percent for the season that ends March 31 from a year earlier, Unica, an industry group, said last week.

There is “growing doubt” that the crop in Brazil, the biggest producer, can increase, supporting prices, Michael McDougall, a senior vice president at Newedge Group in New York, said in an e-mailed report.

Cocoa futures for May delivery climbed 0.6 percent to $2,438 a metric ton on ICE, after touching $2,454, the highest since Jan. 27. The price has jumped 16 percent this year.

In London futures trading, robusta coffee dropped, while refined sugar and cocoa advanced on NYSE Liffe.

--Editors: Millie Munshi, Thomas Galatola

To contact the reporter on this story: Marvin G. Perez in New York at mperez71@bloomberg.net

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net


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