LONDON: Arabica coffee on ICE recovered on Tuesday after hitting a 1-1/2 month low in the prior session, while raw sugar steadied as the wider financial markets shrugged off worries the Omicron coronavirus variant could choke the global economic recovery.
COFFEE
March arabica coffee was up 1.2% to $2.2600 per lb at 1418 GMT, recovering from Monday’s 1-1/2 month ?low. Arabica gained 76% last year.
Dealers said arabica, the biggest gainer among all commonly traded commodities in 2021, was likely to fall next week due to fund index rebalancing.
They estimate the Bloomberg Commodity Index, for example, needs to sell roughly 1% of its coffee portfolio to meet its coffee allocation target for this year. This equals about 13,000 lots of selling, they said.
Honduran coffee exports almost doubled in December versus a year earlier to reach 386,806 60-kg bags, data showed.
March robusta coffee fell 1.8% to $2,328 a tonne. The contract hit a 10-year high of $2,384 last Thursday, and gained 71% for 2021 as a whole.
Robusta stocks in ICE exchange warehouses fell 6,020 tonnes between Dec. 6 and Dec. 31, to total 98,460 tonnes, data showed.
SUGAR
March raw sugar was flat at 18.74 cents per lb. The contract ended 2021 up 21.9% but has since struggled.
Dealers said sugar’s upside was limited for now as lacklustre demand meets adequate supply and improved prospects for the next crop from top producer Brazil.
Brazil has seen widespread rains in the centre-south region of late.
Indian sugar mills have produced 11.56 million tonnes of sugar in the first three months of the 2021/22 marketing year, up nearly 4.3% from the same period a year earlier.
March white sugar ?fell 0.5% to $494.70 a tonne.
COCOA
March New York cocoa ??rose 0.9% to $2,520 a tonne. The contract ended 2021 down just over 3%, bucking the trend in sugar and coffee.
Dealers said the decrease in New York cocoa’s open interest in the last few days suggested speculators had further liquidated their long positions.
March London cocoa was flat at 1701 pounds per tonne?.
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