Coffee rises to 5-year high in London on Vietnam drought
Robusta coffee futures rose to a five-year high in London after gaining in Tokyo on concern a lack of rainfall will damage crops in Vietnam, the biggest supplier of the bean variety.
Robusta has surged 47% this year to the highest since February 2000 on Liffe. Vietnam’s top coffee-producing province may have its driest year since 1978, a government agency said last week.
“Production is falling as Vietnam is facing drought,” said Yutaka Hama, a commodities analyst at Okato Shoji Co in Tokyo. “Concern about the situation is surfacing again.”
Robusta for delivery this month rose $42, or 4% to $1,085 a metric tonne on Liffe at 10:23 am London time. The two-day gain of 10.8% is the biggest in almost three years. On the Tokyo Grain Exchange, Robusta for January delivery ended trading up 600 yen per 100 kilograms, or 5.4%, at 11,770 yen.
Japan is the world’s third-biggest coffee importer, supporting 90,000 coffee and tea shops that sell $9.9 billion of beverages a year.
Bloomberg - March 11, 2005.
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