Bloomberg News

Coffee Falls as Stockpiles, Vietnamese Exports Rise; Cocoa Gains

December 28, 2012

Robusta coffee fell for the first time in seven sessions in London as exchange-monitored stockpiles advanced and exports from top grower Vietnam are set to jump this year. Cocoa advanced.

Robusta coffee stockpiles with a valid grading certificate in warehouses monitored by NYSE Liffe were 106,540 metric tons on Dec. 24, up 1.3 percent from two weeks earlier, according to data on the exchange’s website today. Vietnamese coffee exports will be 201,000 tons this month, the country’s Ministry of Agriculture and Rural Development estimates. Shipments for the year will total 1.76 million tons, an increase of 40 percent from a year earlier, it forecasts.

“While a recent bounce created some meager optimism, Vietnamese supplies will continue to be working into the market and this will weigh on prices,” Sterling Smith, a futures specialist at Citigroup Inc. in Chicago, wrote in a report e- mailed yesterday.

Robusta coffee for March delivery dropped 0.8 percent to $1,905 a ton by 10:13 a.m. on NYSE Liffe in London, 5.3 percent higher this year. Arabica coffee for March delivery was down 1.1 percent to $1.462 a pound in New York. It’s fallen 36 percent this year, making it the worst performing commodity in the Standard & Poor’s gauge of 24 raw materials. Trading in coffee futures on ICE was about 13 percent lower than the 30-day average for this time of day, according to data compiled by Bloomberg.

Robusta coffee stockpiles rose for the first time since Oct. 1, according to NYSE Liffe data compiled by Bloomberg. Inventories have dropped 74 percent since reaching an all-time high of 417,420 tons in July, 2011. Consumption of the variety rose after arabica futures reached a 14-year high last year.

Instant Variety

Demand for robusta coffee will advance about 6 percent to 66.6 million bags in the 2012-13 season, beating a gain of about 1 percent for arabica to 78.6 million bags, according to Volcafe, the coffee unit of commodities trader ED&F Man Holdings Ltd. Roasters that switched to robusta, the beans used in instant coffee, will stick with the variety, according to the trader.

Cocoa for March delivery gained 0.2 percent to 1,444 pounds ($2,324) a ton on NYSE Liffe. The commodity was up 4.6 percent this year. Cocoa for March delivery gained 0.3 percent to $2,262 a ton ICE. It rose 7.4 percent this year.

White, or refined, sugar for March delivery was up 0.2 percent to $523.40 a ton in London. It fell 13 percent this year. Raw sugar for March delivery was 0.2 percent higher at 19.48 cents a pound in New York. It lost 16 percent this year.

To contact the reporter on this story: Isis Almeida in London at Ialmeida3@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at Ccarpenter2@bloomberg.net.


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