ICE arabica coffee futures hit a 4-1/2 month high on Thursday as funds covered their short positions amid tightening supplies, while sugar prices slipped. March arabica coffee rose 3 cents, or 2.8%, to$1.1400 per lb at 1451 GMT, having hit its highest level since early July at $1.1440.
Funds have scaled back a net short position in arabica in the last few weeks, boosting coffee. At the same time, arabica supplies are tightening from recent record levels, with a global deficit forecast for the 2019/20 season, an off-year in Brazil's biennial crop cycle.
Arabica futures are forecast to rise by the end of next year as exchange stocks decline, Rabobank said in an Outlook 2020 report. January robusta coffee rose $5, or 0.4%, to $1,392 per tonne, rising in tandem with arabica.
Domestic coffee prices in Vietnam, the world's top robusta producer, fell slightly this week, with traders saying 2019/20 output would be similar to the previous season. March raw sugar fell 0.03 cents, or 0.3%, to 12.72 cents per lb, having settled up 0.5% in the previous session on news of weak Indian output.
Sugar remains stuck within recent ranges as falling output in the 2019/20 year is offset by producer selling of excess global stocks built up over the past few years of surplus. March white sugar rose $0.70, or 0.2%, to $337.30 a tonne.
March New York cocoa was up $13, or 0.5%, to $2,640 a tonne, having hit $2,694 on Monday, the highest since May 2018. March London cocoa was down 3 pounds, or 0.2%, at 1,915 pounds a tonne, having hit a 1-1/2 year high last week.
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