Coffee advances most in six weeks on concern about Vietnamese stockpiles

Robusta coffee rose the most in almost six weeks in London on concern about stockpiles in Vietnam and production in Colombia. White sugar climbed.

Robusta coffee rose the most in almost six weeks in London on concern about stockpiles in Vietnam and production in Colombia. White sugar climbed.

The volume of unsold coffee in Vietnam, the world’s biggest robusta grower, is probably less than 500,000 bags before the new crop, the Vietnam Coffee and Cocoa Association said Sept. 30. That compares with between 2 million and 2.5 million bags at the same time last year.

“Until we start seeing the newly harvested beans coming out of Vietnam, there’s not a lot of availability right now,” said Kona Haque, a London-based analyst at Macquarie Group Ltd. “Essentially, the past-season stocks have been run down to very low levels.”

Robusta coffee for January delivery gained $38, or 2.3%, to $1,718 a metric ton at 12:52 p.m. on NYSE Liffe. Prices rose as much as 3.9%, the most since Sept. 8.

Colombia, the second-largest producer of arabica coffee, said Oct. 15 a fungus that damages plants may reduce bean production next year, a day after growers cut the forecast for this year’s harvest. Above-average rainfall that affects plants’ ability to flower also may hamper next year’s crop, Agriculture Minister Juan Restrepo said.

No ‘Bumper Crop’

“We are looking at a recovery in Colombian production, but not as high as one would have liked because of the fungus and humidity,” said Haque. “We really needed a bumper crop to alleviate any shortage, and we’re not likely to get that.”

Colombian growers cut the 2010 crop forecast by 5% to 9.5 million bags on Oct. 14.

Arabica coffee for December delivery rose 0.6 cent, or 0.3%, to $1.862 a pound on ICE Futures U.S. in New York. Prices advanced as much as 1.8%.

Sugar gained in London on concern that adverse weather hampered harvests in Brazil, the world’s largest producer, and Russia. Brazil may produce less sugar next year because of a drought and aging fields, Stefan Uhlenbrock, an analyst with Ratzeburg, Germany-based researcher F.O. Licht, said yesterday. Output may come to 40.5 million tons this year, he said.

“Brazil’s likely to have a lower cane crop next year,” Macquarie’s Haque said.

Imports Into Russia

White, or refined, sugar for December delivery rose $2.70, or 0.4%, to $698 a ton on NYSE Liffe.

Russian raw-sugar imports may rise as much as 300,000 tons before 2010 ends, the Institute for Agricultural Market Studies said Oct. 15, cutting its forecast for refining from beets grown domestically by 6.4%. The country suffered this year from its worst drought in at least half a century.

“Due to its own sugar supply, affected by heat and fires, Russia will have to increase its imports considerably in 2010-11 and could become the third-largest importer,” Commerzbank AG analysts led by Frankfurt-based Eugen Weinberg said in a note today.

Raw sugar for March delivery slipped 0.01 cent to 27.57 cents a pound in New York, erasing a gain of as much as 2%.

Cocoa for December delivery fell 0.4% to 1,851 pounds ($2,914) a ton on NYSE Liffe. In New York, cocoa for December delivery dropped 1.7% to $2,746 a ton.- Bloomberg

Tags: Vietnam Coffee, Vietnam coffee prices