NEW YORK/LONDON: Arabica coffee rallied on Friday as the Brazilian real surged to its highest in a year versus the dollar, deterring selling in Brazil by lowering returns in local currency terms.
Raw sugar was little changed, while cocoa recovered. September arabica coffee settled up 4.4 cents, or 2.9%, at $1.578 per lb. The contract gained 4.6% in the week.
Besides the boost from currency, dry conditions in top producer Brazil remain a concern, with few showers expected in coffee growing regions in the next 10 days.
A Brazilian dealer said the local market is quiet amid fears over increasing freight rates, uncertain demand and a lot of material already presold.
Brokers also noted news of falling temperatures in Brazil next week as a cold mass moves over the country, but there is no damage expected to coffee trees.
September robusta coffee settled up $29, or 1.8%, at $1,679 a tonne.
ICE robusta coffee stocks have begun falling this month as the contract’s wide discount to arabica spurs demand.
July raw sugar settled down 0.03 cent, or 0.2%, at 16.90 cents per lb. The contract gained 2.9% in the week.
Brazilian mills in the main center-south region produced 2.19 million tonnes of sugar in the first half of June, 14% less than a year earlier and below market expectations.
French sugar and ethanol group Tereos said on Friday that its head of trading and marketing, Philippe Huet, was leaving, adding to a series of management changes in recent months.
August white sugar settled up $1.00, or 0.2%, at $427.80 a tonne.
September New York cocoa settled up $36, or 1.5%, at $2,380 a tonne, as the market recovered after hitting its lowest since early May on Thursday.
September London cocoa closed up 13 pounds, or 0.8%, at 1,618 pounds per tonne, having also hit its lowest since early May on Thursday.