Coffee Rises for Second Day as Bank Curbs Hurt Vietnam Traders

By Claudia Carpenter

Nov. 4 (Bloomberg) -- Robusta coffee gained for a second day in London on signs traders in Vietnam, the world's largest grower, can't get enough credit from banks to buy stocks from farmers. Sugar and cocoa also rose.

``The middlemen are unable to get funds from the banks to go into the interior and buy coffee,'' said Angus Kerr, owner of coffee trading company Coffee ag in Cobham, England. ``Any small delay seems to affect the market. World supply and demand is almost in balance.''

Robusta for January delivery jumped $30, or 1.8 percent, to $1,672 a metric ton by 1:45 p.m. on the Liffe exchange in London. The gain added to yesterday's 2.4 percent jump.

Commodities slumped last month the most since at least 1956 as bank losses topped $680 billion and consumer confidence declined. Coffee dropped 22 percent, the most since January 2000.

An unidentified bank seized more than 10,000 tons of beans from an exporter in Sumatra, Indonesia, who missed interest payments, Reuters reported, citing unidentified dealers. Indonesian exporters have delayed shipments of at least 30,000 tons of beans after prices in London declined last week to a 17- month low, according to the news service. Kerr said Indonesian coffee prices are now rising.

Indonesia is the third-biggest grower of robusta beans after Vietnam and Brazil, according to the U.S. Department of Agriculture.

Roasters typically stock up on beans as cold weather in the northern hemisphere spurs demand for hot beverages at the same time as growers in Vietnam harvest a new crop of robusta.

Brazilian Exports

Brazil may have exported almost 3 million bags of coffee beans in October, brokerage Sucden (U.K.) Ltd. said in a report today. Shipments were 2.9 million bags in September and 2.2 million in August, according to the International Coffee Organization. A bag weighs 60 kilograms (132 pounds).

White, or refined, sugar for March delivery rose $3.40, or 1 percent, to $345 a ton and cocoa for December gained 13 pounds, or 1 percent, to 1,303 pounds ($2,075) a ton.

Processing of sugar cane in Thailand, the world's second- biggest exporter, may be delayed a month because of low prices, German research company F.O. Licht said in a report dated Nov. 5. Farmers would protest if mills don't start buying their sugar within a month, according to the report. Brazil is the biggest sugar exporter.

Pakistan has delayed a decision until next month on whether to import as much as 400,000 tons of raw sugar to meet domestic demand and has been discouraging imports, the report said. Pakistan may seek a loan from the International Monetary Fund to pay overseas debts. Sugar production this season is estimated at about 3.5 million tons compared with demand of 4.2 million tons, Licht said.

To contact the reporter on this story: Claudia Carpenter in London at ccarpenter2@bloomberg.net