Rainfall in one of the world's main growing area of robusta coffee signals bearish bets as the industry stumbles, falling to its lowest level in almost a year and a half. The weather is expected to be more favorable for growers in Indonesia next week.
The decline in prices of robusta coffee prompted money managers to place tripled bets on the product, said NYSE Liffe, NYSE Euronext's derivative unit.
MDA Weather Services based in Gaithersburg, Maryland predicted that the Southern Sumatra region will experience clearer skies and drier weather this week, which is more auspicious for growing coffee. South Sumatra is among the biggest coffee-growing areas in Asia. Recently, torrents of rain hindered the production and delivery of robusta coffee in the region.
"Roasters, having priced and extended cover above, are now picking away at attractive levels but clearly without the ability to support prices. The pain is clearly to the downside with origin stops having been elected today," said Amro Markets U.K. Ltd., in an e-mail.
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