Robusta coffee, down 7.3 percent this month, resumed declines as speculators bet on lower prices and rains improve the outlook for the next crop in Vietnam, the world’s top producer of the variety. Sugar retreated.
Regular rains in the main growing region of Vietnam are aiding fruit growth and boosting the crop’s quality. Cherries are “a bit bigger than last year,” said Cao Van Tu, chairman of Dak Lak-based Ea Pok Coffee Co. The next crop will be better than the last one, according to Mai Ky Van, deputy director at October Coffee-Cocoa One Member Ltd. Money managers boosted bets on falling prices of robusta by 35 percent to a 17-month high in the week ended June 11, according to NYSE Liffe.
Robusta coffee climbed more than 4 percent in January and February on speculation dry weather in Vietnam would cut output for the season that starts in October. Vietnamese coffee fell to 36,600 dong ($1.74) a kilogram (2.2 pounds) on June 14, the lowest since Feb. 3, 2012, data from the Daklak Trade and Tourism Center showed. Prices rose to 37,000 dong today.
“Drought conditions in the central highlands of Vietnam are no longer a factor,” Sterling Smith, a futures specialist at Citigroup Inc. in Chicago, said in a report e-mailed yesterday. “Our outlook for robusta is neutral to mildly bearish. Barring a weather disruption we expect prices to range from $1,700 a metric ton to $1,900 a ton.”
Robusta coffee for September delivery fell 0.6 percent to $1,753 a ton by 11:41 a.m. on NYSE Liffe in London. The price was unchanged yesterday and gained 1.9 percent on June 14. Arabica coffee for September delivery was little changed at $1.233 a pound on ICE Futures U.S. in New York.
Arabica coffee prices fell 3 percent this month as dry weather helped accelerate the harvest in Brazil, the world’s leading producer. Growers will gather a record crop for a year in which trees enter the lower-yielding half of a two-year cycle, the government estimates.
White, or refined, sugar for August delivery fell 0.7 percent to $488.50 a ton in London. Raw sugar for October was 1.4 percent lower at 17.01 cents a pound in New York.
Cocoa for delivery in September gained 0.2 percent to 1,462 pounds ($2,286) a ton on NYSE Liffe. Cocoa for September delivery was up 0.1 percent at $2,216 a ton on ICE.
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