By Julie Wernau
Coffee prices rose Thursday on fears that dry weather in some
coffee-growing regions could lead to shortages.
Vietnam and Indonesia, the world's first- and third-largest
growers of robusta coffee, a bitter bean variety typically found in
coffee blends and instant coffee, warned that dry conditions caused
by the El Nino weather event are intensifying, threatening crops
there.
At least one trading firm has built up a large position in the
July robusta contract, which is traded in London, and that has some
investors anticipating higher prices and making the switch to the
more mild-flavored arabica bean, brokers said.
Arabica coffee for September delivery rose 2.4% to $1.251 a
pound on the ICE Futures U.S. exchange.
"If you can't grab from one pile, you go and grab from the
other," said Hector Galvan senior broker at R.J. O'Brien Futures in
Chicago. "Even though they are different types of coffee, when you
have short falls in one market, you'll see the other one
rally."
In other markets, raw sugar for October was up 0.2% to 11.48
cents a pound, cotton for December fell 0.3% to 63.72 cents a
pound, cocoa for September rose 0.1% to $3,220 a ton and frozen
concentrated orange juice for September rose 0.6% to $1.235 a
pound.
Write to Julie Wernau at julie.wernau@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires