LONDON: Arabica coffee futures on ICE climbed to their highest level in almost a decade on Wednesday, boosted by tightening supplies in major consuming markets, while sugar and cocoa prices also rose.
March arabica coffee rose 2.8% to $2.3085 per lb by 1510 GMT after peaking at $2.3485, the highest level for the benchmark second position since January 2012.
Dealers said delays to shipments from South America as well as adverse crop weather in both Brazil and Colombia had helped to fuel the run-up in prices.
“High freight costs and shipping delays from South America to Asia are lending a tailwind to coffee prices,” asset manager WisdomTree said in a report on Wednesday, adding excessive rains caused by La Nina had also hurt yields in Colombia, the world’s second largest producer of arabica coffee.
Demand is also beginning to pick-up as COVID-19-related movement restrictions are gradually eased in several major consuming countries including the United States.
January robusta coffee rose 1% to $2,259 a tonne.
March raw sugar rose 1.65% to 20.31 cents per lb after peaking at 20.34 cents - the highest level for the front month in more than one month.