LONDON: Robusta coffee climbed to the highest level in almost nine months in London as prices in Vietnam, the world’s largest producer of the variety, continued to rise.
Vietnamese coffee advanced to 43,000 dong or US$2.06 a kilogram (2.2 pounds) on May 25, the highest price since October 17, data from the Dak Lak Trade & Tourism Center showed.
Higher prices slowed trading in the Southeast Asian nation last week, according to Volcafe, the coffee unit of commodities trader ED&F Man Holdings Ltd. While exporters were looking to buy, there weren’t offers, the trader said in a report on May 25.
Robusta coffee has climbed 25% so far this year, while the arabica variety, traded in New York, has fallen 26%. That caused the price difference between the two kinds to fall to 66 cents a pound on May 25 from US$1.45 a pound at the end of last year, data on Bloomberg show.
Traders sold arabica futures before a record crop in top producer Brazil and on concerns slowing economies would dent demand.
“Liffe’s robusta once again ignored what happened to its rich cousin and was little impacted by concerns about commodity demand and a possible drop in appetite by China,” Rodrigo Costa, a coffee market specialist, wrote in a report for Brazil’s Archer Consulting e-mailed yesterday.
He was referring to arabica coffee, which is usually more expensive.
Robusta coffee for July delivery was up 0.8% to US$2,258 a metric ton by 10:25 a.m. on NYSE Liffe in London, the highest price since September 5. The commodity gained 13% this month. Trading in soft commodities on ICE Futures US in New York, where arabica coffee trades, was stopped for the Memorial Day holiday.
Vietnam’s coffee exports may total 150,000 tons this month, down from 168,000 tons in April and 53 percent more than in the same period last year, the General Statistics Office in Hanoi said on May 25. (Bloomberg/T03)