Funds pushed arabica coffee to the highest level in 12-2/3 years on Monday, on the weak dollar and tight nearby supplies, while raw sugar pivoted sharply lower. Cocoa finished mixed as the firm pound against the US dollar helped lift the ICE market.
Benchmark December arabica futures closed up 3.50 cents or 2 percent at $1.8110 a lb, the highest settlement for the second position since December 1997. The session high reached $1.8290 per lb. The arabica/robusta spread has been on an upward climb, reaching about $1 on Monday, up sharply from about 72 cents in mid-June.
Arabica futures have rallied more than 30 percent since mid-June in a fund-fuelled rally, while near-term supplies tighten. ICE certified arabica stocks have fallen steadily to the lowest level in more than 10 years, reaching just over 2 million bags by August 13, down more than 40 percent from a year ago.
ICE October raw sugar dropped 0.48 cent, or by 2.47 percent, to end at 18.94 cents per lb, down from the two-week top hit on Friday of 19.42 cents. London October white sugar traded up $1.30 to close at $551.20 per tonne. ICE December cocoa inched up $4 to close at $2,889 per tonne, in heavy volume, with support from the strong sterling.