Home »Agriculture and Allied » World » Arabica coffee futures extend rebound, raw sugar up
Arabica coffee futures on ICE rose on Tuesday, extending a rebound from a recent 13-year low, while raw sugar prices were marginally higher. July arabica coffee futures were 1.30 cents, or 1.45%, higher at 90.90 cents per lb by 1421 GMT, pulling away from a 13-year low of 87.60 cents set earlier this month. Dealers said the market may rise further in the short term following a prolonged decline driven by excess supplies after last year's record crop in Brazil.

"We suspect that prices are bottoming out and should pick up slightly by the end of this year," Capital Economics said in a market note, forecasting that prices could rise to 105 cents per lb this year. Dealers said low prices were beginning to have an adverse impact on production.

"Prices remain below production costs in many countries with producers leaving farms in Central and South America," Rabobank said in a market update, adding there could be a reduction in global supply in 2019/20. July robusta coffee rose $31, or 2.3%, to $1,377 a tonne, extending its rebound from a nine-year low of $1,267 set earlier this month.

Capital Economics forecast that robusta prices could recover to $1,600 a tonne this year. July raw sugar rose by 0.03 cent, or 0.25%, to 11.87 cents per lb. Dealers said the market had stabilised after falling sharply in the second half of April and early May. Supplies remained ample, however, while trade conflict between the United States and China kept overall commodity markets on the defensive.

"We don't see anything on the horizon in the short term to alter the bearish picture other than an unexpected bullish macro development (a resolution of the US/China trade talks for example)," Sucden Financial senior trader Nick Penney said in a market note. ICE August white sugar was up $0.30, or 0.1%, at $326.70 a tonne. July London cocoa was up 6 pounds, or 0.35%, at 1,708 pounds a tonne.

Dealers noted a weakening in the front month May's premium to July to around 108 pounds from 155 pounds at the close on Monday. A shortage of good-quality cocoa in Europe had helped to drive up the May contract's premium recently. July New York cocoa rose by $39, or 1.7%, to $2,326 a tonne.

Copyright Reuters, 2019


the author

Top
Close
Close