If one had to cite one reason for the rally, it would be Vietnams rainfall, said Gillian Turco, an analyst with Rabobank Groep, the worlds biggest agricultural lender. The fundamentals have improved consistently in the past six weeks, she said in a telephone interview from Utrecht, Netherlands.
Robusta for September delivery, the most active contract, fell as much as $35 to $1,050 a metric tonne, the lowest since April 19, on the Liffe exchange in London. The contract was trading at $1,067 a tonne as of 12:30 pm in London.
Prices of Robusta, bitter-tasting beans used in instant coffee by makers such as Nestle SA and Kraft Foods Inc, have risen 41% this year, and were due for a correction, Ms Turco said. Hedge funds and other large-scale speculators see adequate production and stocks in 2005 and 2006, Ms Turco said.