LONDON: Arabica coffee futures on ICE rose to their highest level in almost a decade on Wednesday, boosted by tightening supplies in major consuming markets, while sugar prices also rose.
March arabica coffee rose 3.2% to $2.3170 per lb by 1200 GMT after peaking at $2.3235, the highest level for the benchmark second position since January 2012.
Dealers said delays to shipments from South America as well as adverse crop weather in both Brazil and Colombia had helped to fuel the run-up in prices.
“High freight costs and shipping delays from South America to Asia are lending a tailwind to coffee prices,” asset manager WisdomTree said in a report on Wednesday, adding excessive rains caused by La Nina had also hurt yields in Colombia, the world’s second largest producer of arabica coffee.
Demand is also beginning to pick-up as COVID-19-related movement restrictions are gradually eased in several major consuming countries including the United States.
January robusta coffee rose 1.9% to $2,280 a tonne.
Arabica coffee prices rise, cocoa and sugar also climb
March raw sugar rose 0.55% to 20.10 cents per lb.
Dealers noted the sugar season in India was off to a strong start with the upside continued to be capped by the potential for a pick-up in exports from the South Asian country if prices were to rise to around 20.50 cents.
Output at Indian sugar mills from Oct. 1 to Nov. 15 rose by nearly a quarter year on year to 2.09 million tonnes as many operations started crushing earlier than usual, a trade body said on Wednesday.
March white sugar rose 1% to $518.90 a tonne.
March London cocoa fell 0.3% to 1,697 pounds a tonne.
March New York cocoa was down 0.2% at $2,548 a tonne.