Bloomberg News

Robusta Coffee Gains on Falling Stockpiles; Sugar, Cocoa Decline

January 11, 2013

Robusta coffee climbed for a second day in London as stockpiles of the beans used in instant drinks and espresso continue to decline. Cocoa and sugar retreated along with most of the commodities.

Robusta coffee stockpiles with a valid grading certificate in warehouses monitored by NYSE Liffe were 104,860 metric tons on Jan. 7, down 1.6 percent from two weeks earlier, according to data on the exchange’s website yesterday. Inventories have fallen 75 percent since reaching an all-time high of 417,420 tons in July 2011. Commodities slid as the dollar advanced, making raw materials priced in the U.S. currency less attractive as an alternative investment. The Standard & Poor’s GSCI gauge of 24 raw materials slid as much as 0.4 percent.

“Robusta is gaining a slight support from lower stockpiles but volume is still very low,” Jerome Jourquin, the head of agricultural commodity derivatives at brokerage Aurel BGC in Paris, said by e-mail today. “Coffee traded down the past three months, reaching the targets on both arabica and robusta. January should be a month of consolidation.”

Robusta for March delivery advanced 0.2 percent to $1,922 a ton by 10:22 a.m. on NYSE Liffe in London. It gained 0.4 percent yesterday. Arabica coffee for March delivery slid 0.4 percent to $1.491 a pound on ICE Futures U.S. in New York.

Robusta coffee gained 6.3 percent last year while arabica beans lost 37 percent, making them the worst performing commodity in the GCSI index in 2012. Arabica prices fell partly because of a record crop in top producer Brazil and rising inventories of the variety favored by Starbucks Corp. (SBUX:US)

Brazil’s Harvest

The coffee harvest in Brazil this year may approach 2012’s output even as trees enter the lower-yielding half of a two-year cycle, the Agriculture Ministry said. Producers will harvest between 47 million and 50.2 million bags, compared with 50.8 million last year, ministerial crop-forecasting agency Conab estimated. Another large crop could push prices to as low as $1.40 a pound, Jose Milton Dallari, a director at the Rio de Janeiro-based National Agricultural Society, said in an interview this week.

White, or refined, sugar for March delivery slid 0.4 percent to $510.40 a ton in London. Raw sugar for March delivery retreated 0.4 percent to 18.88 cents a pound in New York.

Cocoa for March delivery was down 0.7 percent to 1,432 pounds ($2,307) a ton on NYSE Liffe. Cocoa for March delivery fell 0.8 percent to $2,250 a ton on ICE.

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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