Coffee,cocoa stumble on ICE as sugar gains

ARABICA COFFEE FU TURES ON THE IN TERCONTINENTAL EXCHANGE ICE RETREATED from a 10-year high set earlier in the week, pressured by a strong dollar. March arabica coffee slipped 1.5 per cent to $2.3660 Prices had risen on Tuesday to a 10-year high of $2.5235.

March robusta coffee fell 0.95% to $2,284 a tonne, hovering just below a 10-year high of $2,334. Market dealers said the arabica market remained underpinned, however, by supply tightness following a drop in exports from Colombia and bottlenecks in top producer Brazil, which have disrupted shipments.

Dealers also observed that the robusta market remained focussed on the harvest in Vietnam as heavy rains delayed harvest activities in the world’s leading robusta producing country. March London cocoa was down 0.95 per cent to 1,661 pounds a tonne, while March New York cocoa fell 0.2 per cent at $2,445 a tonne.

Dealers said the newly discovered Omicron coronavirus variant has led to some concerns about whether demand would continue to recover although there remained some optimism about the outlook for prices. “We think the growth in demand will outpace that of supply,” Fitch Solutions noted, while forecasting an average price of 1,775 pounds in 2022.

On the other hand,the sugar market enjoyed sweet deals as March raw sugar gained 0.05 per cent to 19.70 cents per lb., while March white sugar rose 0.04 per cent to $510.90 a tonne.Tobin Gorey, analyst at Commonwealth Bank of Australia, said mills in Brazil, some of which can switch between using cane to make biofuel ethanol or sugar, had hedged a smaller proportion of production than at the same stage in 2020.

“The lower hedge level is in part a sign that Brazil’s mills are reluctant to commit to sugar over ethanol yet,” he added.