Coffee Climbs in New York on Supply Concern; Cocoa Declines

By Debarati Roy
Bloomberg

May 13, 2010

Coffee rose for the fifth-straight session on concern that global supplies may lag behind demand. Cocoa dropped for the second time in three days.

World coffee output probably will decline 4.8 percent to 122 million bags in the year that began on Oct. 1, the International Coffee Organization said in a report on May 11. Prices have climbed 2.7 percent in the previous four sessions.

“The short-term supply concern is pushing prices higher,” said Rodrigo Costa, a vice president of institutional sales at Newedge USA LLC in New York. “The dollar’s strength, however, will limit the gains.”

Arabica coffee for July delivery rose 0.7 cent, or 0.5 percent, to $1.3755 a pound at 9:53 a.m. on ICE Futures U.S. in New York. Before today, the commodity gained 6.3 percent in the past year.

The euro traded near its lowest level since March 2009 on concern that governments may not cut deficits fast enough after the European Union announced an almost $1 trillion bailout for the region’s most-indebted countries.

In another ICE market, cocoa for July delivery declined $51, or 1.7 percent, to $2,921 a metric ton. Before today, the most-active contract fell 1.5 percent this week.

-----
With assistance from Ben Levisohn in New York and Paul Dobson in London. Editors: Michael Arndt, Steve Stroth.

To contact the reporter on this story: Debarati Roy in New York at droy5@bloomberg.net.
To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net.