Robusta coffee declined to the lowest level in almost a week in London on speculation farmers in Vietnam, the top producer of the variety used in instant drinks, will start selling as the harvest advances. Sugar fell.
Vietnam will produce a record 29 million bags of coffee in the 2013-14 season started there last month, estimates Kona Haque, a London-based analyst at Macquarie Group Ltd. As the harvest advances, Vietnamese prices fell to 29,600 dong ($1.40) a kilogram (2.2 pounds) on Nov. 7, the lowest since 2010, data from the Daklak Trade & Tourism Center on Bloomberg showed.
"Any rally in London will encounter Vietnam selling as the harvest advances," Alex Parry, a broker at ABN Amro, said by e-mail today. "The Vietnamese would definitely start selling if the market rallied $80 to $100 a ton and that will offer quite a large amount of resistance, which offers some reassurance to the managed shorts."
Robusta coffee for January delivery slid 0.7 percent to $1,455 a metric ton by 11:25 a.m. on NYSE Liffe in London. The price touched $1,454 a ton, the lowest for a most-active contract since Nov. 8. Arabica coffee for March delivery fell 0.2 percent to $1.057 a pound on ICE Futures U.S. in New York.
Robusta coffee fell 24 percent this year, while the arabica variety slid 27 percent and is heading for a third year of losses, the longest slump since 1993. Global coffee supplies will be 8.7 million tons higher than demand in 2013-14, with a surplus of 6.4 million tons of arabica and 2.4 million tons of robusta, Macquarie estimated in a Nov. 11 report.
Money managers held the biggest bet on lower robusta coffee prices since 2012, NYSE Liffedata compiled by Bloomberg showed. Net-short positions, or wagers on lower prices, amounted to 10,593 futures and options in the week ended Nov. 5.
Refined, or white, sugar for delivery in March was down 0.2 percent to $470.20 a ton on NYSE Liffe. The December futures, which expire tomorrow, were trading at $455.40 a ton. Raw sugar for delivery in March retreated 0.2 percent to 17.77 cents a pound on ICE Futures U.S.
Sugar output in Mexico, the biggest supplier to the U.S., will slide to 6.695 million tons in the 2013-14 season, industry group Conadesuca said in its first estimate for the crop. That compares with 6.97 million tons a year earlier.
Cocoa for delivery in March fell 0.3 percent to 1,703 pounds ($2,725) a ton in London. In New York, cocoa for March delivery fell 0.2 percent to $2,660 a ton. ICE Futures trading volumes were 31 percent lower than the average for the past 100 days for this time of day, according to data compiled by Bloomberg.