LONDON: ICE arabica coffee hit a four-month peak on Tuesday amid concerns over supply bottlenecks and signs of improved consumption, while raw sugar surged to a 4-1/2 month high.
Both contracts were at levels seen before the coronavirus crisis, as a weaker dollar drove fund buying of commodities.
December arabica coffee was up 4.3 cents, or 3.4%, to $1.2770 per lb? by 1355 GMT, having hit a four month high of $1.2795.
ICE coffee stocks slumped by 0.05 million 60-kg bags on a daily basis to 1.538 million bags, the lowest level since July 2017, data showed.
The International Coffee Organization (ICO) revised its forecast for the global coffee market balance in the current 2019/20 season, predicting a deficit of 486,000 60-kg bags.
"The ICO has returned almost exactly to its March (market balance) forecast, i.e. before the corona crisis began," noted Commerzbank.
Citi upgraded its second-half arabica price forecast from $0.90/lb to $1.08/lb due to the southern hemisphere cold snap, a weakening dollar and improved consumption data.
September robusta coffee rose $62, or 4.4%, to $1,466 a tonne, having hit a 7-1/2 month peak of $1,466.
Robusta is gaining support from coronavirus lockdowns in top grower Vietnam and signs of higher consumption.
October raw sugar rose 0.11 cents, or 0.9%, to 12.89 cents per lb, having hit a 4-1/2 month high earlier of 12.96.
"Prices are benefiting from positive news on demand and uncertainties regarding future (supply) in India, Thailand and Europe," said consultants Agritel.
They noted Brazil's exports surged in July amid improved demand, most notably from China, but added sugar's gains will be capped by the prospect of a surplus next season.
October white sugar rose by $2.20, or 0.6%, to $377.30 a tonne.
December London cocoa was flat at 1,674 pounds a tonne.
December New York cocoa rose $27, or 1.1%, to $2,474 a tonne.
"The recent chart rally in New York is likely to lose steam at $2,400-2,500/t. An uneven economic recovery, the likely cancellation of Halloween and live events remain concerns," said Citi.
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