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Arabicas rally to 13-1/4-yr peak, sugar surges
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LONDON: ICE coffee futures rallied to a 13-1/4 year high on Wednesday and were within sight of the psychological $2 a lb, while raw sugar touched a fresh six-month top, supported by tight supplies, and cocoa eased.
ICE second-month coffee futures erased gains to stand up 1.0 cent at 193.90 cents a lb at 1502 GMT, having earlier touched a peak of 198.65 cents a lb. Nestor Osorio, Executive Director of the International Coffee Organization (ISO), said in a monthly letter that the current behaviour of prices reflects uncertainties concerning short-term coffee supplies despite a large crop seen in Brazil.
Colombia's coffee production rose 55 per cent in August to 615,000 60-kg bags versus 397,000 sacks produced in the same month last year, the country's growers' association said on Tuesday. London's November robusta futures rose in moderate volumes, erasing early strong gains like arabicas.
Liffe November robusta coffee was up $21 at $1,641 per tonne in turnover of 6,247 lots.
ICE raw sugar futures inched lower having earlier climbed to a fresh six-month high, propped up by expectations the global sugar market is likely to be in equilibrium rather than surplus in 2010/11, tight stocks and a big line-up of vessels at Brazilian ports.
Dealers noted strong physical demand for the sweetener, and mentioned talk of a Tunisian white sugar buying tender for nearby delivery.
Tight market fundamentals in sugar could ease in the coming months, dealers said.
"With more production coming onstream in the northern hemisphere in the fourth quarter, there will be less demand for Brazilian raws," one analyst said. ICE October raw sugar futures stood at 21.32 cents a lb, down 0.13 cent. London October white sugar was up $1.00 at $606.80 per tonne in thin turnover of 5,037 lots.
London cocoa futures fell, pressured by expectations for good-sized crops in West Africa. Liffe December cocoa was down 45 pounds at 1,898 pounds a tonne. ICE second-month cocoa was up $3 at $2,725 per tonne.
Cocoa arrivals at ports in top grower Ivory Coast reached 1,140,337 tonnes by Sept 5, exporters estimated on Tuesday, 0.5 per cent ahead of the same period last season. -Reuters
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