NEW YORK/LONDON: Coffee futures on ICE, for both arabica and robusta types, hit fresh multi-year highs on Wednesday amid upbeat sentiment in wider financial markets and a tight supply outlook. Sugar and cocoa also rose.

July arabica coffee settled up 9.5 cents, or 6.8%, at $1.4985 per lb, the highest level since February 2017.

July robusta coffee settled up $64, or 4.3%, at $1,538 a tonne, the highest price since March 2019.

Dealers said fund buying is facing little resistance from producer selling, as growers in Brazil remain worried about the size of this year’s crop and hold on to new sales.

“As the market rose, new buy stops were hit, taking it even higher,” a broker said.

Recent reports from coffee majors such as Starbucks indicate demand is improving as COVID-19 vaccinations progress.

Commerzbank said that in contrast to arabica, the robusta harvest in Brazil is expected to be a respectable 20.7 million bags.

“We continue to expect the robusta price in the fourth quarter at $1,300 per tonne,” it said.

July raw sugar settled up 0.41 cent, or 2.4%, at 17.53 cents per lb.

“While we do not expect a sustained return to the prices seen in February, we are raising our (raw sugar) forecast for the fourth quarter to 16 cents per pound,” said Commerzbank in a note.

“(Supply) risks have increased. The higher oil price could lead to a greater shift in the use of sugar cane to (make) ethanol. In addition, forecasts for sugar cane (output) in Brazil have been reduced in view of the excessive dryness.”

The global sugar supply balance is heading to surplus in 2021/22 despite the fall in Brazil, Datagro said.

August white sugar settled up $11.00, or 2.4%, at $460.80 a tonne.

July New York cocoa settled up $71, or 3.1%, to $2,395 a tonne.

July London cocoa settled up 21 pounds, or 1.3%, to 1,599 pounds per tonne, having hit its lowest since last July on Tuesday at $1,575.

Cocoa has been pressured by a widely forecast global surplus for the current 2020/21 season.