Concerns about tight coffee supplies and fund buying catapulted arabica coffee to close above the $2 a lb for the first time in 13 years on Thursday. Raw sugar futures finished a choppy session lower while cocoa closed higher, recouping losses from earlier this week.
The coffee market's recent strength led to system fund buying while crop concerns in top robusta producer Vietnam and washed-arabica exporter Colombia had also helped fuel the run up, dealers said. ICE December arabica coffee futures jumped 4.25 cents or by 2.2 percent to end the day at $2.01 per lb, the first time to rise above $2 since September 1997.
Colombia, the world's third-largest coffee grower, had two consecutive years of lower production due to adverse weather and a tree renovation program. It had been hoped that 2010/11 output would show a recovery. ICE raw sugar futures fell 0.46 cent to close at 28.35 cents per lb, following three straight days of gains, reversing off a nine-month peak of 29.23 cents a lb. ICE December cocoa climbed $40 to finish at $2,817 per tonne.
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