LONDON: World robusta coffee prices rallied on Monday after U.S. exclusions on some tariffs allowed investors to turn their attention back to worries over falling supplies of the instant coffee ingredient.
Data last week showed robusta exports from Brazil, the world’s second largest shipper of the bean, tumbled some 84% in March from a year ago. Meanwhile, certified stocks in ICE exchange warehouses are at 1-1/2 month lows.
“The trade is expecting lower Brazilian production this year due to the extended drought last year, the ‘off-year’ in their biennial production cycle, and disappointing rainfall over the past few months,” said broker ADMISI.
At 1101 GMT, robusta coffee futures traded on the ICE exchange, which serve as a global price benchmark, were up 2.3% at $5,164 a metric ton, having lost 1.5% last week.
Arabica coffee futures, used largely in pricier roast and ground blends, rose 0.7% to $3.5600 per lb, having lost 2.7% last week.
U.S. President Donald Trump on Friday granted exclusions from steep tariffs on smartphones, computers and some other electronic goods imported largely from China, but then warned on Sunday that levies were still likely.
Investors remain concerned that a trade war could weaken global economic growth and dent demand for consumer goods, but major stock indexes in Europe and Asia nevertheless bounced on Monday thanks to the brief reprieve.
In other soft commodities traded, London cocoa futures fell 1.6% to 6,111 pounds a metric ton, having lost 3% last week, while New York cocoa fell 1.9% to $8,280 a metric ton, having 1% last week.
Cocoa investors continue to fear a downturn in demand for the chocolate ingredient thanks to historically high prices.
Dealers said first quarter cocoa grind data, a measure of demand, will likely show steep falls of 5-7% later this week.
Raw sugar was unchanged at 18.00 cents per lb, having lost 4.4% of its value last week, while white sugar fell 1.1% to $517.40 a ton.
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