Arabica coffee hits one-week high

NEW YORK/ LONDON: Arabica coffee futures on ICE rose to the highest level in more than a week on Wednesday as crop losses in top producer Brazil remained the main supportive factor, while robusta coffee climbed to a one-month peak.

COFFEE

December arabica coffee closed up 0.6 cent, or 0.3%, at $1.8635 per lb, after climbing to a peak of $1.8825, the highest in more than one week.

Dealers said the market remained underpinned by supply tightness, with a combination of drought and recent frosts in Brazil denting the outlook for coffee production this year and in 2022.

“Given that coffee looks set to remain in short supply, there are reports that producers are noticeably reluctant to sell,” Commerzbank said in a note.

Losses from frosts may have affected 18-20% of Brazil’s crop, the agriculture minister said on Tuesday, revising up the scale of the damage.

Brazilian farmers started to take out dead coffee trees after the frosts, and some will switch to grains.

November robusta coffee settled up $2, or 0.1%, at $1,973 a tonne, after hitting a one-month high of $1,985.

COCOA

December New York cocoa ??settled up $42, or 1.6%, at $2,612 a tonne.

Rabobank said in a note that the market had derived support from expectations that production in Ivory Coast and Ghana will likely fall in the upcoming 2021/22 season which begins in October.

It said that rainfall now appears in line with average in Ivory Coast and Ghana but “the rocky start to rainfall in the region this season, especially in Ghana, will likely still have an impact on production.”

December London cocoa closed up 15 pounds, or 0.8%, at 1,795 pounds per tonne?.

SUGAR

October raw sugar rose 0.15 cent, or 0.8%, to 19.73 cents per lb.

Dealers said the market is pausing after recent gains caused by diminishing prospects for Brazilian production.

“Much of that is already priced in, so we may not necessarily see the market reacting further,” said Rabobank in a note.

The United States said on Wednesday it was increasing its lower-tariff sugar import quota by 90,100 tonnes as it tries to increase short-term supplies.

October white sugar closed up $1.30, or 0.3%, at $478.80 a tonne.