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Markets

Arabica coffee climbs, raw sugar also rises

  • July arabica coffee was up 1.8 cents, or 1.3%, at $1.4205 per lb .
  • May raw sugar was up 0.37 cents, or 2.2%, at 17.10 cents per lb.
  • July New York cocoa rose by $8, or 0.3%, to $2,377 a tonne.
04 May 2021

LONDON: Arabica coffee futures on ICE were higher on Tuesday, boosted by the prospect of tightening supplies with Brazilian production set to decline sharply this season, while raw sugar also rose.

COFFEE

July arabica coffee was up 1.8 cents, or 1.3%, at $1.4205 per lb by 1133 GMT. The benchmark second position peaked at $1.4765 last week, its highest since February 2017.

The market has been supported by dry weather in Brazil during April which could lead to a further downward revision in the size of the 2021/22 crop by reducing bean size and may even have an impact of the following crop.

"In general it just looks tight going forward. I think demand will be consistent and surprise to the upside if anything," Cardiff Coffee Trading said in a report, forecasting this year's Brazil coffee crop at 54.06 million bags including 34.59 million bags on arabica.

Brazil's 2021/22 crop is an off-year in the country's biennial cycle.

July robusta coffee rose by $25, or 1.7%, to $1,481 a tonne.

SUGAR

May raw sugar was up 0.37 cents, or 2.2%, at 17.10 cents per lb.

Dealers noted funds were increasing a net long position against the backdrop of concerns about production prospects in the key Centre-South region of Brazil following drier-than-normal weather in recent months that hurt cane development.

Brazil's 2021/22 center-south cane crush is seen in a range between 567 and 578 million tonnes, compared to a previous projection of 586 million tonnes, broker and analyst StoneX said on Monday.

August white sugar rose by $4.50, or 1%, to $452.90 a tonne.

COCOA

July New York cocoa rose by $8, or 0.3%, to $2,377 a tonne.

Below average rainfall mixed with long sunny spells last week in most of Ivory Coast's cocoa growing regions could hurt bean quality for the April-to-September mid-crop, farmers said on Monday.

July London cocoa was unchanged at 1,607 pounds a tonne.