Cocoa futures on ICE rose to a seven-week high on Thursday, boosted by fund buying, while arabica coffee approached an eight month peak underpinned by a shortage of Colombian supplies, dealers said. Raw sugar prices were lower in London, however, as the market slipped back after rising to the highest level in nearly three years earlier this week.
"Funds have been a major driving force," one London cocoa dealer said. July cocoa on ICE was up $81 at $2,590 a tonne at 1621 GMT after earlier rising to $2,598, the highest level for the spot contract since April 9. "The cocoa story remains firmly bullish," said Nicholas Snowdon, an analyst at Barclays Capital.
"I don't think there is a specific catalyst," he said. "The market focus has gradually shifted away from (bearish) grindings data over the past month to the supply side." Snowdon said production in Ivory Coast and Indonesia was in long-term decline.
London September cocoa futures were up 64 pounds to 1,707 pounds per tonne. Sugar prices were lower as prices fell back after climbing to the highest levels in almost three years earlier this week. Dealers said, however, prices were likely to be well supported in the coming months, bolstered by demand for the sweetener from India and Pakistan. "We are still constructive on sugar in the longer term," one London dealer said.
ICE July raw sugar futures were down 0.19 cent to 15.581 cents per lb, while London August white sugar was down $1.40 to $450.50 per tonne. Meanwhile, arabica coffee futures continued to hold strong, with the rise underpinned by a shortage in Colombia. July arabica coffee futures on ICE rose 1.70 cents to $1.3710 per lb, just below an eight-month high for the front month of $1.3780 set on Wednesday.
Robusta coffee futures in London were lower with the market remaining rangebound. "We've traded down to very close to the recent low (in July robustas of $1,503 per tonne, and we've hit $1,504," one London dealer said. Dealers talked of steady industry buying interest in robustas. London July robusta coffee futures were down $10 to $1,526 per tonne.