LONDON: Arabica coffee futures on ICE climbed to the highest level in nearly 10 years on Tuesday, boosted by supply tightness, while sugar prices also rose.
March arabica coffee rose 2.5% to $2.3710 per lb by 1456 GMT after peaking at $2.3990 - its highest since January 2012.
Rabobank said worries about logistical issues has spurred panic buying across the market.
Dealers said roasters are rushing to buy, having collectively given up on the hope that prices will fall.
They also noted nearby coffee futures are moving to a premium versus those further out, indicating supply tightness.
Certified stocks continue to fall in both arabica and robusta.
January robusta coffee rose 0.8% to $2,270 a tonne.
March raw sugar rose 0.7% to 19.89 cents per lb.
Dealers said they were keeping a close watch on the potential for the La Nina weather phenomenon to lead to another poor sugarcane crop in Brazil next year.
Australia’s weather bureau said on Tuesday a La Nina weather phenomenon had developed in the Pacific Ocean for the second year in a row. La Nina can lead to drier-than-normal weather in southern Brazil, a region which suffered from drought this year.
Brazil’s government on Tuesday reduced by nearly 10% its projection for this season’s sugar production in the centre-south region to 30.7 million tonnes after an evaluation of the impact of drought and frost on crops.
March white sugar rose 0.6% to $511.20 a tonne.
March London cocoa rose 0.4% to 1,747 pounds a tonne, having hit a one month high of 1,758 pounds, boosted partly by the weakness of sterling against the dollar. March New York cocoa fell 0.8% to $2,568 a tonne.