LONDON: Arabica coffee futures on ICE rose on Friday, heading back up to a near 10-year peak hit in the previous session on tightening supplies.
Sugar was little changed meanwhile, though cocoa headed lower.
Coffee
March arabica coffee rose 2.3% to $2.3440 per pound at 1333 GMT, after reaching $2.3835 on Thursday, the highest level for the benchmark second position since January 2012.
“Coffee prices have (reached) new multi-year highs on the back of poor supply outlooks in Brazil and Colombia (and) expectations La Niña could cause further crop issues,” said Fitch Solutions in a note.
The market’s recent strong performance has also fuelled technically driven buying.
January robusta coffee rose 1.9% to $2,254 a tonne.
Erratic weather has slowed the bean ripening process in top robusta producer Vietnam.
Arabica coffee climbs to highest level in almost a decade
Sugar
March raw sugar was flat at 20.17 cents per lb, after peaking at 20.69 cents on Thursday, the highest level for the front month since February 2017.
“Sugar prices have risen further as reduced sugarcane supply in Brazil has been further compounded by increased cane diversion to ethanol, while global demand for sugar trends upwards,” said Fitch Solutions.
Thailand’s sugarcane production is expected to rise by nearly a third this season, bouncing back from decade-low levels hit last year due to drought.
The International Sugar Organization on Thursday forecast a global sugar deficit of 2.55 million tonnes in the 2021/22 season, with a diminished outlook for consumption reducing the anticipated shortfall. The inter-governmental body had previously forecast a deficit of 3.85 million tonnes in 2021/22.
March white sugar was little changed at $516.60 a tonne.
Cocoa
March London cocoa fell 0.5% to 1,717 pounds a tonne.
“We expect (cocoa) prices to rise from spot (levels) over the coming months as grindings recover. We are bearish in softs in 2022, with the exception of cocoa for which the continued demand recovery will send prices higher,” said Fitch Solutions.
March New York cocoa closed down 0.9% to $2,567 a tonne.
Source: Brecorder
