Vietnam Rainfall Brings Coffee Prices Down
Robusta coffee fell in London as rainfall in growing regions of Vietnam, the world’s largest producer of the robusta variety, eased concerns a drought earlier this year would cut output. Cocoa advanced.
Most areas in Dak Lak province, representing about 30 percent of Vietnam’s coffee crop, will get 60 millimeters (2.4 inches) to 90 millimeters of rain in the 10 days through May 20, the Meteorology and Hydrology Department said in a report e-mailed today. Recent rains in the coffee belt completely erased the threat of drought, Nguyen Chi Cuong, chief executive officer at trading company NC Group Ltd., which has offices in Ho Chi Minh City, said in an e-mail on May 3.
“The drought appears to have ended in Vietnam, which should help bring more of the current crop to the market, as well as up expectations for next year’s production,” Sterling Smith, a futures specialist at Citigroup Inc. in Chicago, said in a report e-mailed on May 10. “While the chart of arabica looks bad, robusta looks worse.”
Robusta coffee futures for delivery in July slid 0.4 percent to $2,022 a metric ton by 10:48 a.m. on NYSE Liffe in London. Arabica coffee futures for the same delivery month fell 0.6 percent to $1.436 a pound on ICE Futures U.S. in New York.
Vietnam’s harvest may climb to 1.5 million tons in the year starting in October from the prior period’s 1.43 million tons, the median of 10 trader and shipper estimates compiled by Bloomberg showed. That would be the most since a record 1.65 million tons in the 2011-12 season.
White, or refined, sugar for delivery in August was little changed at $489.10 a ton on NYSE Liffe. Raw sugar for delivery in July rose 0.6 percent to 17.53 cents a pound on ICE.
The premium white sugar commanded over raw slid 12 percent this month to $102.70 a ton, data on Bloomberg showed.
“The reason for the fall is both lower demand — the Ramadan rush is coming to an end — and higher supply, notably people coming to terms with the prospect of Mexico as a substantial exporter,” Paul Bannister, head of sugar brokerage at Marex Spectron Group, said in a report e-mailed today.
Cocoa for delivery in July rose 0.3 percent to 1,532 pounds ($2,352) a ton in London. Cocoa for the same delivery month added 0.1 percent to $2,303 a ton in New York.