Coffee Up 14% On Chinese Consumer Demand

Bloomberg.com

Sugar, Cocoa, Coffee Gain as Commodities Advance on China

By Isis Almeida - Jan 10, 2013 10:54 AM GMT

Sugar, cocoa and coffee climbed in London and New York as raw materials advanced after Chinese data showed exports increased more than forecast in December.

China's overseas shipments increased 14.1 percent from a year earlier, the most since May, customs administration data showed today. That compares with the 5 percent median forecast in a Bloomberg News survey of 40 economists. A broad measure of credit in the Asian nation surged 28 percent. The data lifted commodity prices, with the Standard & Poor's GSCI gauge of 24 raw materials rising as much as 1.1 percent. Cotton also gained in New York.

"The general market sentiment is positive, lifting commodity prices across the board," Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt, said by e-mail today. "China's data were the trigger for this."

Robusta coffee for March delivery advanced 0.7 percent to $1,924 a metric ton by 10:32 a.m. on NYSE Liffe in London. White, or refined, sugar for March delivery was up 0.7 percent to $510.70 a ton, while cocoa for delivery in the same period gained 0.3 percent to 1,430 pounds ($2,295) a ton on NYSE Liffe.

The Chinese export and credit figures helped the Asian nation's new leaders sustain a pickup in economic growth after a seven-quarter slowdown. Aggregate financing of 1.63 trillion yuan ($262 billion), which includes bank and non-bank lending, was up from 1.27 trillion yuan a year earlier, according to the central bank.

In New York, arabica coffee for March delivery rose 0.7 percent to $1.49 a pound on ICE Futures U.S. Raw sugar for March delivery gained 1 percent to 18.91 cents a pound and cocoa for delivery in the same period was up 0.9 percent to $2,242 a ton. Cotton for March delivery advanced 0.3 percent to 75.03 cents a pound on ICE.

"Soft commodities prices have fallen to such low levels that bearish news should be priced in now," Fritsch said. Arabica coffee fell 37 percent in New York in 2012, while raw sugar declined 16 percent.

Disclosure: I am long JO.