Arabica heads back towards four-year highs on tightening supplies
- July London cocoa rose 0.1% to 1,631 pounds per tonne.
- July arabica coffee rose 0.5% to $1.5175 per lb, having set a four-year peak of $1.5365 on Thursday.
LONDON: Arabica prices rose on Friday, heading back towards a four-year high hit in the prior session, while raw sugar hit its lowest in 2-1/2 weeks but remained within the confines of its recent range.
SUGAR
July raw sugar fell 1.7% to 16.75 cents per lb at 1259 GMT.
India on Thursday cut sugar export subsidies by 31.4% for the season that ends on Sept. 30.
Dealers said the announcement is unlikely to have any serious impact on the season's exports as it is widely thought Indian traders had contracted to sell over 5.5 million tonnes of the 6 million tonne export target before the subsidy cut.
They added macroeconomic indicators were generally negative, with many traders sidelined awaiting news that might dictate direction.
Traders at an ISO Datagro sugar conference this week said sugar is well supplied with no tightness expected in the short term and sales from speculators is on the cards if the macroeconomic environment worsens.
August white sugar fell 1.2% to $447.90 a tonne.
COFFEE
July arabica coffee rose 0.5% to $1.5175 per lb, having set a four-year peak of $1.5365 on Thursday.
Rains that are forecast to reach Brazil's main coffee areas this weekend and intensify in the days after could delay some harvest work, but are expected to improve conditions for next year's crop.
Road blockades connected to weeks of anti-government protests in Colombia, the world's second largest arabica exporter, were still in place on Thursday, stymieing exports and causing food and gasoline shortages.
Brazil's crop forecast has been revised down by consultancy Safras & Mercado, with arabica output seen 31% down.
July robusta coffee rose 0.1% to $1,488 a tonne.
COCOA
July London cocoa rose 0.1% to 1,631 pounds per tonne.
July New York cocoa edged up 0.2% to $2,448 a tonne.
"Cocoa will remain weak during most of 2021 as it will take time for demand to recover, and we expect much more significant rises in 2022," said Fitch Solutions in a note. It sees London cocoa averaging 1,750 this year.
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