By Isis Almeida December 17, 2013
Robusta coffee fell to a one-week low in London as farmers in Vietnam, the world’s largest producer of the robusta variety, increase sales before Tet, the festival that marks the Lunar New Year. Sugar retreated.
Growers will sell 30 percent of their crop before Tet in late January, according to a Bloomberg survey of 12 traders and analysts published on Dec. 11. Sales were 10 percent to 12 percent of the harvest last week, Volcafe, the coffee unit of commodities trader ED&F Man Holdings Ltd. said in a Dec. 13 report. Farmer selling is “picking up,” the trader said.
“Increased sales from Vietnamese producers are expected over the coming weeks,” Sterling Smith, a futures specialist at Citigroup Inc. in Chicago, said in a report e-mailed yesterday. “This should contain prices.” Farmers in Vietnam usually accelerate sales to obtain cash before the Tet holidays.
Robusta coffee for March delivery dropped 2.3 percent to $1,728 a metric ton by 12:19 p.m. on NYSE Liffe in London. The price touched $1,727 a ton, the lowest for a most-active contract since Dec. 10. Arabica coffee for March delivery fell 1 percent to $1.142 a pound on ICE Futures U.S. in New York, on trading volumes that were 19 percent higher than the 100-day average for this time of day.
The beans used to make instant coffee and espresso fell 10 percent this year partly as traders anticipated a record crop from Vietnam. The southeast Asian nation will produce 29 million bags of 60 kilograms in the 2013-14 season started Oct. 1, estimates Kona Haque, a London-based analyst at Macquarie Group Ltd., Australia’s biggest investment bank.
Coffee exports from Vietnam advanced 31 percent to 80,372 tons in November from a month earlier, the General Customs Department said on its website yesterday. Vietnamese beans for January and February shipments were last week at a premium of $30 a ton over the futures price, down from $50 a ton a week earlier, Volcafe said in the Dec. 13 report.