ICE arabica coffee futures were slightly lower on Tuesday in thin trade ahead of the New Year holiday but remained on track for a strong annual gain. March arabica coffee dipped by 0.3 cents, or 0.2%, to $1.3185 per lb by 1107 GMT. Arabica coffee prices are on course for a 29.5% gain over 2019, recovering ground after declines in both 2017 and 2018.
"Coffee prices have rallied considerably in recent weeks as concerns regarding low Brazilian stocks and dry weather in Vietnam have led to a significant rally in speculative sentiment," Fitch Solutions said in a market note. Large speculators covered a net short position in arabica coffee during November and early December and are now extending a net long, CFTC data showed.
March robusta coffee fell $4, or 0.3%, to $1,371 a tonne. Robusta coffee prices are on track for a 10.1% drop in 2019, the third successive annual decline. March raw sugar was unchanged at 13.53 cents per lb. Raw sugar prices are on track for a 12.5% gain for 2019,
with the market beginning to recover after falling in 2017 and 2018. Prices have been supported by tightening supplies, with a global deficit widely forecast for the current 2019-20 season. Strong demand for ethanol in Brazil has helped to tighten the market, with a high proportion of cane used to produce the biofuel rather than sugar.
Brazil has never produced as much ethanol as in the current season, a record high of about 35 billion litres, though available stocks may still not be enough to meet demand over the down-period between crops. March white sugar fell $0.30, or 0.1%, to $361.10 a tonne.
White sugar prices are on track for an 8.6% gain in 2019. March New York cocoa was up $17, or 0.7%, at $2,480 a tonne. New York cocoa prices are on track for a modest annual gain of 2.6%, reflecting a balanced global market. March London cocoa rose 13 pounds, or 0.7%, to 1,812 pounds a tonne. London cocoa prices are also on track for an annual gain of 2.6%.
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