LONDON: Robusta coffee futures on ICE held just below last week’s 10-year high on Tuesday as short-term tightness driven by supply chain issues remained the key supportive factor.
March robusta coffee rose a marginal 0.04% to $2,354 a tonne by 1445 GMT with the market consolidating just below the recent 10-year high of $2,381.
Dealers said supply chain issues, including a shortage of container shipping capacity, continued to slow the flow of supplies from top robusta producer Vietnam.
Front month January was trading at a premium of around $111 to March.
March arabica coffee rose 0.5% to $2.2825 per lb, regaining some ground after falling by 1.8% on Monday.
March raw sugar was 0.4% lower at 19.13 cents per lb.
Dealers said a strong start to the sugarcane harvest in major exporter Thailand was weighing on the market.
The recent run-up in crude oil prices has, however, provided some support, helping to drive demand for biofuel ethanol, particularly in Brazil.
Dealers said data issued by cane industry group UNICA earlier this week, which showed sales of hydrous ethanol in Brazil’s domestic market had begun to climb in the first half of December, provided evidence that rising gasoline prices were prompting motorists to switch to using more ethanol.
Strong demand for ethanol can lead to more use of cane to produce the biofuel rather than sugar and help reduce supply of the sweetener.
March white sugar fell 0.4% to $501.40 a tonne.
March London cocoa was unchanged at 1,680 pounds a tonne with a stronger pound keeping a lid on prices.
Cocoa arrivals at ports in top grower Ivory Coast since the start of the season in October are estimated to have reached 1 million tonnes by Dec. 26, exporters said on Monday, down 5.9% from the same period last season.
March New York cocoa was up 1.3% at $2,493 a tonne.