Coffee futures in New York advanced the most in three weeks as unusually wet weather threatened crops in Colombia, the second-largest grower of arabica beans.
A La Nina weather pattern will continue to bring above- average rain to Colombia into next year, the government’s meteorological agency said. Storms in recent weeks caused flooding and mudslides, damaging the nation’s coffee crop, the agency said yesterday. Futures in New York have jumped 54 percent this year, heading for the biggest gain since 2004.
“The primary concern right now is dealing with Colombia’s harvest,” said Mu Li, a commodity analyst at CPM Group in New York. “Coffee prices are definitely going to stay elevated until the end of this year and the first two quarters of next year.”
Arabica coffee for March delivery rose 5.05 cents, or 2.5 percent, to settle at $2.096 a pound at 2 p.m. on ICE Futures U.S. in New York, the biggest gain since Nov. 18. Prices are up 2.3 percent this week.
A shortage of high-quality arabica coffee has led to “precariousness of the supply/demand balance,” the International Coffee Organization said in a report today.
Prices may rise to as high as $2.40 a pound this year on supply concerns in Colombia, where output may fall “slightly,” Luis Genaro Munoz, the chief executive officer of Colombia’s National Federation of Coffee Growers, said in a speech yesterday in New York.
In London, robusta-coffee futures added $4, or 0.2 percent, to $1,908 a metric ton on NYSE Liffe.
(Leslie Patton, Bloomberg)