Bets robusta coffee futures traded in London will rise by 27 percent before September more than doubled in the past month as farmers in top producer Vietnam and third-ranking Indonesia hold back beans, NYSE Liffe data show.
Investors held 7,591 contracts giving the right to buy futures for September delivery at $2,200 a metric ton as of June 19, up from 3,301 contracts a month earlier, exchange data on Bloomberg showed. That was the most active option for September. Robusta coffee fell 13 percent to $1,736 a ton in the past month as speculators placed the biggest bearish bets in more than 17 months in the week ended June 11, Liffe data showed.
“Farmers in Indonesia and Vietnam are holding beans back because of falling futures,” Judy Ganes-Chase, the president of J. Ganes Consulting in Panama City, Panama, said by phone from Chicago yesterday. “Exporters there are struggling to ship.”
Money managers boosted bets on falling robusta coffee prices by 35 percent in the seven days ended June 11, NYSE Liffe data showed. Net-short positions amounted to 9,587 futures and options in the period, the biggest since Jan. 10, 2012.
Buyers of coffee from Indonesia are paying bigger premiums for their beans as futures fall and farmers hold back supplies, Volcafe, a unit of commodities trader ED&F Man Holdings Ltd., said June 14. Farmers and middlemen in Vietnam held 24 percent of the country’s crop as of June 1, said Amsterdam-based trader Nedcoffee BV, which also has offices in Ho Chi Minh City.
Indonesian beans for shipment in July and August were last week at a premium of $200 a ton to the price on NYSE Liffe in London, up from $150 in the previous seven-day period, according to Volcafe. In Vietnam, premiums gained 12.5 percent to $135 a ton last week for shipment in the same period, data from the Winterthur, Switzerland-based trader showed.
“Differentials should stay be firm,” Ganes-Chase said, referring to the premium buyers of physical coffee pay relative to the futures price. “Vietnam had a bigger crop, still demand was good. A lot of people are still underplaying demand for robusta.”
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.