Robusta coffee rose 2.5 percent this week, the first weekly advance since January, on speculation of reduced supplies from Vietnam, the world's largest grower.
Exporters in Vietnam have delayed or halted shipments on 150,000 to 200,000 metric tons of beans for the 2009-10 season because of reduced credit and falling prices, Dow Jones reported Friday, citing unidentified traders. Robusta coffee fell to a record last week since the 10-ton futures contract started trading in January 2008.
"This is something that could create big problems down the road," said Shawn Hackett, president of commodities research and trading company Hackett Financial Advisors Inc. in Boynton Beach, Florida. "If roasters don't get delivery of the supply they thought they were going to get, they have to go buy replacement coffee."
Robusta coffee for May delivery closed down $9, or 0.7 percent, at $1,258 a ton on the Liffe exchange in London as most commodities declined because of an increase in the value of the dollar, Hackett said. Before this week, the contract had dropped 14 percent since Jan. 8.
Arabica coffee for May delivery on ICE Futures U.S. in New York declined 2.4 percent to $1.3235 a pound at 5:41 p.m. London time. The dollar rose 0.5 percent against the euro, making commodities traded in the U.S. currency more expensive for people using the single European currency.
White, or refined, sugar for May delivery dropped 0.8 percent to $528.10 a ton on Liffe. Prices have declined for five consecutive weeks.
Tropical Cyclone Ului approached Australia's Queensland state, the country's sugar-cane growing area, and is forecast to make landfall on March 21, according to the Joint Typhoon Warning Center.
"It's hard to draw any conclusion at this stage as to the impact on the cane crop," said Peter de Klerk, an analyst at C. Czarnikow Sugar Futures Ltd. in London. The harvest is supposed to begin in June, he said.
Prices of sugar have dropped about 30 percent from a two- decade high in January on prospects for bigger crops in Brazil and India as Pakistan, Egypt and other buyers held back purchases. A Reuters report Thursday that Tunisia bought 14,000 tons of Algerian white sugar "could have a certain effect because it may change sentiment that buyers are returning to the market at least for small volumes," said Stefan Uhlenbrock, an analyst at F.O. Licht GmbH in Germany.
Agriculture is "much cheaper" than other commodities, said investor Jim Rogers. "I would rather put new positions in agriculture."
Cocoa for May delivery decreased 0.7 percent to 2,198 pounds ($3,302) a ton.