Arabica coffee hits three week high, raw sugar gains

• May arabica coffee rose 0.7 cents, or 0.6pc, at $1.1200 per lb at 1219 GMT, having hit its highest since late January at $1.1380.
• May robusta coffee fell $6, or 0.5pc, to $1,308 a tonne, having set a 3-1/2 month low of $1,277 last week.
• Sugar is being driven by widening deficit forecasts for this season, with the latest concerns centring around output in Thailand, a key exporter.

LONDON: ICE arabica coffee hit a three week high on Tuesday, extending last week's 10pc surge on fund short-covering and a dearth of producer selling. Raw sugar headed back towards last week's 2-1/2 year peak.

COFFEE

May arabica coffee rose 0.7 cents, or 0.6pc, at $1.1200 per lb at 1219 GMT, having hit its highest since late January at $1.1380.

"Looks like speculators are starting to cover their shorts. Also, Brazil sold a lot of their crop in the last rally, so there's not enough resistance to the upside," said a dealer.

"I've seen a lot of bullish trades coming through today, I do think we could keep going up (near term)."

Brazilian coffee company 3Coracoes has agreed to purchase a large part of Mitsui & Co Ltd's coffee business in Brazil for 210 million reais ($48.55 million), increasing its leading share in Brazil's ground roasted coffee market.

Brazilian truck drivers began protesting early on Monday at Latin America's largest port in Santos, affecting the unloading of shipments and arrival of trucks at the port.

May robusta coffee fell $6, or 0.5pc, to $1,308 a tonne, having set a 3-1/2 month low of $1,277 last week.

SUGAR

March raw sugar was up 0.08 cents, 0.5pc at 15.14 cents per lb?, having hit a 2-1/2 year high of 15.90 cents last Wednesday before losing some ground.

Sugar is being driven by widening deficit forecasts for this season, with the latest concerns centring around output in Thailand, a key exporter.

Dealers noted that top producer Brazil, from around April, could increase its sugar production at the expense of ethanol, which appears now to be fetching less money than the sweetener. They added, however, that until then, sugar prices should remain well supported.

India's sugar exports are likely to jump by nearly a third from a year ago to more than 5 million tonnes in 2019/20 as a rally in global sugar prices makes exports attractive, a leading trade body said.

May white sugar rose $3, or 0.7pc, at $412.50 a tonne.

COCOA

May London cocoa fell 1 pound, or 0.1pc, at 2,016 pounds a tonne, having hit a three-year high last week of 2,074 pounds.

Cocoa traders remain concerned over dry weather and stock hoarding in top producer Ivory Coast, though ample rainfall last week in some of the country's cocoa-growing regions has brought some relief.

May New York cocoa fell $0.4, or 0.1pc, at $2,882 a tonne.