Coffee Futures Jump 6% on Asia, Latin America Rains

By Leslie Josephs
The Wall Street Journal

October 21, 2011

NEW YORK—Heavy rains and flooding in Vietnam and Latin America drove coffee futures up more than 6%, as concerns grew over the near-term availability of supplies.

Arabica coffee for December delivery was up 6.1% at $2.46 a pound in early trade on the IntercontinentalExchange.

Torrential rain has claimed scores of lives across Central America, knocked mature coffee berries from trees, and damaged infrastructure across the region, the supplier of 10% of the world's coffee.

Heavy rain is also pummeling Colombia, the world's second-largest producer of arabica beans after Brazil, sparking concerns that disease and fungus would hurt this season's crop.

Floods in Vietnam may also hurt coffee shipping.

"I think people are realizing that the price fall was exaggerated," said Hernando de la Roche, a senior vice president at INTL Hencorp Futures in Miami, referring to a recent dip in prices. Futures fell as low as $2.2835 a pound earlier this week.