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Robusta coffee hits 4-1/2 year high, arabica also up

NEW YORK/LONDON: Robusta coffee futures on ICE rose more than 3% on Tuesday to a four-and-a-half year peak, boosted by ongoing disruptions in the flow of coffee from Vietnam, while arabica coffee prices were also higher.

COFFEE

January robusta coffee closed 3.4% up at $2,270 a tonne, after rising to a peak of $2,278 – the highest level for the benchmark second position since February 2017.

Dealers said the market was supported by a major shortage of shipping containers in Vietnam that was curbing exports, as well as by heavy rains in the Central Highlands that are negative at this point when harvesting approaches.

Renewed outbreaks of COVID-19 in Vietnam, the world’s top robusta producer, could hinder cherry picking when the harvest gets underway next month.

Dealers said the disruption to the flow of coffee from Vietnam was creating short-term supply tightness in the market, with front-month November commanding a large premium to January.

The front-month contract rose 5.3% on the first notice day for the contract.

December arabica coffee settled up 5.55 cents, or 2.7%, at $2.081 per lb.

SUGAR

March raw sugar closed up 0.27 cent, or 1.4%, at 19.26 cents per lb.

Dealers said the market derived some support from data showing sugar production in the key Centre-South region of Brazil during the first half of October was down a larger-than-expected 56% versus the same period a year earlier.

A rise of 7% in gasoline prices in Brazil, effective Tuesday, also helped to boost the market, increasing the incentive to use cane in Brazil to produce biofuel ethanol rather than sugar.

But production in the country is set to recover next year after ample October rains.

December white sugar rose ?$5.90, or 1.2%, at $511.30 a tonne.

COCOA

March London cocoa settled down 9 pounds, or 0.5%, to 1,768 pounds per tonne?.

Dealers said an improving outlook for the main crop in top grower Ivory Coast has helped put the market on the defensive.

Weather forecasters Climate42 said prediction models favor minimal harmattan – the dry winds hitting Western Africa from November to February – over the cocoa regions in November, and average or milder than average in December, which is positive for the crops. December New York cocoa lost $35, or 1.3%, to $2,581 a tonne.

Robusta coffee hits 4-1/2 year high, arabica also up

Source: Brecorder

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