Dealers said the market was on track for a sixth consecutive session of gains. The run-up in prices has been driven by fund short-covering against the backdrop of lower exports from Brazil and the potential for the next crop in the world's top producer to be smaller than previously expected.
"Lower coffee shipments from Brazil would reduce the very high stocks in the consumer countries - all the more so if the ambitious expectations for the upcoming coffee crop in Brazil fail to be met," Commerzbank said in a market note. "We expect the arabica coffee price to climb to 145 cents by the end of 2018," the bank added.
March robusta coffee rose $2, or 0.1 percent, to $1,735 a tonne. March raw sugar was off 0.05 cents, or 0.3 percent, at 15.28 cents a lb after peaking at 15.37 cents, its highest since November 28. Dealers said the market had been boosted this week partly by the prospect of index funds buying about 60,000 lots in the coming days to rebalance after sugar's poor performance in 2017. However, the prospect of a sharp rise in production this season helped to keep a lid on prices, with dealers noting that an industry body in India said sugar output in the fourth quarter of 2017 rose by 26 percent year on year.
Commodity analyst Green Pool on Wednesday said it had raised its forecast for a projected global sugar surplus in the 2017/18 season to 10.43 million tonnes, up from a previous forecast of 9.80 million. "There remains some disconnect between current market prices and the potential for a surplus of the size we are forecasting," Green Pool said in a report. March white sugar was up $0.20, or 0.05 percent, at $398.80 a tonne.
March London cocoa was down 13 pounds, or 0.9 percent, at 1,370 pounds a tonne. Dealers said the strong pace of port arrivals in top grower Ivory Coast was helping to keep the market on the defensive. March New York cocoa fell by $24, or 1.2 percent, to $1,912 a tonne.