Arabica coffee prices jump more than 3pc; sugar falls

NEW YORK/LONDON: Arabica coffee futures on ICE closed more than 3% up on Thursday, boosted partly by a strengthening in the currency of top producer Brazil, while cocoa and sugar prices weakened.

COFFEE

March arabica coffee settled up 4 cents, or 3.4%, at $1.2105 per lb, boosted partly by a stronger Brazilian real .

The Brazilian real jumped on Thursday after the central bank hinted for the first time its policy easing cycle could end soon amid a rise in inflation, while data showed a better-than-expected upward move in October retail sales.

A stronger real decreases dollar-denominated prices in local currency terms and can curb producer sales, including hedging operations with futures.

March robusta coffee settled up $17, or 1.3%, at $1,351 a tonne.

Robusta harvest in top producer Vietnam is now about 20% to 25% complete with the weather favourable and production now likely to drop less than previously anticipated.

COCOA

March New York cocoa settled up $18, or 0.7%, to $2,567 a tonne after dipping to a low of $2,522, the weakest since Nov. 18.

Dealers said price charts were looking more bearish after the recent decline while rains this week in top producer Ivory Coast look set to improve the outlook for the mid-crop.

March London cocoa settled up 2 pounds, or 0.1%, to 1,727 pounds per tonne.

SUGAR

March raw sugar fell 0.31 cent, or 2%, to 14.74 cents per lb, returning part of the strong gains posted in the previous session.

Mills in Brazil's center-south region produced 427,000 tonnes of sugar in the second half of November, 22% more than in same period a year earlier but 60% less than in the previous fortnight as the season winds down.

Dealers said sugar production was slightly lower than expected but had little impact on prices.

The US Department of Agriculture (USDA) raised its estimate for the country's sugar imports by around 400,000 short tonnes in 2020-21.

March white sugar fell $7.60 to $401.60 tonne.