Robusta coffee rebounded in London, supported by a second day of gains in arabica futures, as shipments from Vietnam are forecast to drop. Cocoa gained.
Coffee exports from Vietnam, the biggest grower of the robusta variety used in instant drinks and espresso, will probably fall 35 percent in April to 110,000 metric tons, according to a forecast by the General Statistics Office in Hanoi. Shipments are down 17 percent this year. Arabica coffee is heading for a second day of gains in New York after prices fell as much as 4.6 percent on April 23.
"Sentiment will remain bullish for robusta, supported by depreciating stock-levels," Mathijs Deguelle, a soft commodities and food analyst at ABN Amro Bank NV, said in a quarterly report e-mailed today. "We expect robusta to appreciate to a level of $2,300 a ton at the end of 2013, with significant risk on the upside should markets perceive a shift to a deficit in the 2013-14 season."
Robusta for delivery in July rose 0.4 percent to $1,999 a ton by 1:45 p.m. on NYSE Liffe in London. Arabica futures for delivery in July gained 0.5 percent to $1.3915 a pound on ICE Futures U.S. in New York.
Robusta climbed 3.9 percent this year and arabica fell 3.2 percent. While speculators are betting on robusta price gains, they hold wagers on lower prices for the arabica variety, data from NYSE Liffe and the U.S. Commodity Futures Trading Commission on Bloomberg show.
Arabica will make "a soft landing" at about $1.25 a pound, ABN Amro forecast. That will result in the price difference between the two coffee varieties being low enough to spur roasters to use more arabica, Deguelle said. Arabica futures were 49 cents a pound more expensive than robusta beans at the time of writing, data compiled by Bloomberg show.
"The magic number for a sizeable switch is widely regarded to be around 20 cents to 25 cents a pound," he said.
White sugar for August delivery was 0.2 percent higher at $500.40 a ton in London. Raw sugar for July delivery slid as much as 0.7 percent to 17.25 cents a pound, the lowest since July 19, 2010, before rebounding to 17.41 cents a pound.
Cocoa for July delivery rose 0.3 percent to 1,555 pounds ($2,403) a ton on NYSE Liffe. Cocoa futures for July delivery rose 1.5 percent to $2,360 a ton on ICE, and earlier reached $2,364, the highest intraday price for a most-active contract since Dec. 20.
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