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Robusta may fall further on Vietnam speculation, Rabobank says
Robusta coffee may fall another 10 percent by the end of March on speculation about more supply from Vietnam, the world’s biggest grower of the beans, according to Rabobank International.
A price floor “may not be too far away,” with a surplus of the beans expected to narrow to 2 million bags in the current season from 4.9 million bags a year earlier, Rabobank analyst Doug Whitehead said by phone from London Friday. Robusta futures have dropped 14 percent this year on the Liffe exchange.
“There are signs that a floor for robusta prices may be approaching, with 2009-10 supply and demand looking more balanced,” Whitehead wrote in a report dated Thursday.
Robusta futures for January delivery rose 0.2 percent to $1,330 a metric ton at 3:59 p.m. on Liffe. The beans are used in instant coffee and espresso, while the milder arabica variety is favored for specialty beverages.
Prices may find support as roasters seek fresh beans from new harvests in Vietnam and Uganda, Africa’s second-biggest coffee grower after Ethiopia, Whitehead said. Demand is forecast to rise 1.9 percent, according to Rabobank.
“Traditionally Vietnamese exports ramp up after the Chinese new year,” in February next year, Whitehead said. “What we’ll see between now and then is traders accumulating physical coffee, and when they hedge that exposure, we could see more selling pressure.”
thanhnien, bloomberg
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