Coffee Surges to Two-year High on Supply Concern; Cocoa Falls

By Debarati Roy

June 15 (Bloomberg) -- Coffee futures jumped to a 27-month high in New York on concern that global supplies may lag behind demand and as a weaker dollar lifted demand for commodities. Cocoa declined.

Led by coffee, the Reuters/Jefferies CRB Index of 19 raw materials rose as much as 1.4 percent. The dollar slipped for a fifth time in six days against a basket of six currencies. Coffee exports from Uganda, Africa’s biggest exporter, may fall 17 percent this month from a year earlier, the Uganda Coffee Development Authority said last week.

“People are concerned about availability,” said Hector Galvan, a senior trading adviser at RJO Futures in Chicago. “Also, the dollar weakening in the past few days has supported coffee prices.”

Arabica coffee for September delivery gained 8.35 cents, or 5.5 percent, to $1.5995 a pound on ICE Futures U.S. in New York. The price touched $1.6105, the highest level for a most-active contract since March 6, 2008. The commodity gained 20 percent in the last six sessions.

“The market was overrun by fund buying after a relatively calm first half-session,” according to a report by Sucden Financial Ltd. in London.

Speculative long positions, or bets prices will rise, outnumbered short positions by 12,216 contracts in New York as of June 8, U.S. government data show.

Cocoa futures for September delivery declined $4, or 0.1 percent, to $2,969 a metric ton in New York. The chocolate ingredient has fallen 9.7 percent this year.

On London’s Liffe exchange, cocoa futures for July delivery lost 21 pounds, or 0.8 percent, to 2,464 pounds ($3,653) a ton. Robusta-coffee futures for September delivery gained $12, or 0.8 percent, to $1,570 a ton. Earlier, the commodity rose to $1,593, the highest level since March 12, 2009.

To contact the reporter on this story: Debarati Roy in New York at droy5@bloomberg.net.
Last Updated: June 15, 2010 14:53 EDT