Robusta Slips as Market Hovers Near More-Than-3-Year Low

Neena Rai

  Robusta coffee futures slipped in early European trading Thursday, with the

market hovering near a recent more-than-three-year low, as harvest pressure

from top producer Vietnam and weakness in New York's arabica market weighs on

prices.

  At 1100 GMT, January robusta coffee futures fell 0.3% to $1,505 a metric ton.

Oct. 29, the market hit a more-than-three-year low of $1,462 a ton.

  "We believe that coffee prices will be less sensitive to weather conditions

in Brazil now that the Brazilian 2013-14 harvest is largely complete. Weather

conditions elsewhere will also have a diffused impact on prices because

production is fragmented in the countries that start their harvest in October,"

Nitesh Shah, associate director of research at ETF Securities said.

  "With global production remaining high, we believe the current price is

justified, but we are watching a number of catalysts that could drive prices

higher," said Mr. Shah.

  Meanwhile, cocoa futures for March delivery edged higher 0.5% to GBP1,698 a

ton as harvest pressure out of top producer Ivory Coast weighs.

  "Fundamentally, prices were supported by the strong physical demand of cocoa

as reflected by grindings data from North America, Europe and Asia," Phillip

Futures said.

  The market hit a two-year high of GBP1,774 a ton Oct. 15.

  "However, we see that this support has dissipated recently due to improving

weather in Ivory Coast, the world's top grower of cocoa. Fears of supply issues

were easing as key cocoa growing regions are experiencing favorable weather

conditions which would boost the prospects of the incoming cocoa crop," added

the brokerage.

  European Union wheat futures for November delivery advanced 0.6% to EUR203 a

ton, consolidating from the previous session's losses. The previous session's

losses were fuelled by improving supply prospects for the grain, said dealers.

  "The situation appears to be easing on the supply side: India, for example,

has lowered the minimum price for wheat exports from state warehouses by 13% to

$260 per ton in a bid to kick start wheat exports again, which had come to a

standstill," said Commerzbank.

  "China is likely to be one possible buyer, in which case it would be less

reliant on U.S. wheat. Chinese demand for U.S. wheat was one of the factors

that drove up the wheat price," added the bank.

  December sugar futures slipped 0.3% to $483.80 a ton, as the market erases

all gains that supported the market near a one-year high Oct. 18. Dealers said

ample supplies of the sweetener are likely to limit price gains for now.