Arabica coffee and raw sugar futures were higher on Monday, supported by a strengthening in Brazil's real currency that could deter producer selling. March arabica coffee was up 0.60 cents, or 0.4 percent, at $1.6270 per lb at 1432 GMT, while March raw sugar rose 0.13 cent or 0.65 percent to 20.28 cents a lb. "The currency (stronger real) is a factor that is supporting arabicas and could explain why it is performing better than robusta," said Abah Ofon, analyst for Agrimoney's Global Coffee Monitor.
Brazil is the world's top producer of arabica coffee and sugar, while Vietnam is the leading grower of robusta coffee. The real rose about one percent against the dollar on Monday, reducing the attractiveness of dollar-based international prices in local currency terms.
January robusta coffee futures fell $23, or 1.1 percent, to $2,129 a tonne, with the harvest in Vietnam beginning to gather pace. "I think (the harvest in) Vietnam is a factor that is simmering," Ofon said, adding recent weakness in coffee prices was more to do with a jittery mood among investors who have been scaling back long position in coffee.
"We will get some bearish pressure on the back of Vietnam although the expectation is that Vietnam will not export as much as it did last year and so the impact on the market will be more muted," he added, noting Vietnam's crop was expected to be down about 11 percent. March white sugar rose $1.20, or 0.2 percent, to $537.10 per tonne. Cocoa futures showed mixed trends, with the strength of sterling against the dollar weighing on prices in London.
March London cocoa was off 12 pounds, or 0.6 percent, at 2,001 pounds a tonne, while March New York cocoa rose $24, or 1.0 percent, to $2,449 a tonne. Dealers said an increase in the pace of port arrivals in top grower Ivory Coast was helping to keep a lid on prices, along with favourable crop conditions in the world's top producer.
Light rain and hot weather in most of Ivory Coast's cocoa growing regions last week will strengthen the October to March main crop and help produce large, good quality beans through the beginning of next year, farmers said on Monday. Cocoa arrivals at ports in top grower Ivory Coast totalled around 71,000 tonnes from November 14 to 20, up from 54,000 tonnes in the same period last season.
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