NEW YORK, May 28 (Reuters) – Coffee prices on the ICE exchange saw a significant rise of more than 5% on Tuesday, driven by fund buying due to growing concerns about adverse weather conditions in key production areas worldwide. Additionally, sugar and cocoa prices experienced notable gains.
COFFEE
- July robusta coffee (LRCc1) surged by $228, or 5.9%, to settle at $4,120 per metric ton.
- July arabica coffee (KCc1) climbed 5.8% to $2.3095 per pound, after reaching a four-week high of $2.3320.
Market analysts attributed the rally to unfavorable weather patterns and production challenges in Vietnam and Brazil, the two leading coffee producers. Vietnam is facing a shortage of rain, which could impact the next robusta crop. Meanwhile, Brazil’s early harvest reports have been less than optimistic, and a prolonged dry, hot spell in key coffee regions raises concerns for the 2025 crop.
SUGAR
- July raw sugar (SBc1) increased by 0.32 cents, or 1.7%, to settle at 18.73 cents per pound.
Dealers indicated that the rapid pace of cane crushing in Centre-South Brazil has pressured the market, although the dry weather aiding the harvest might negatively affect the latter part of the crop. This week, industry group Unica is expected to release data on Brazil’s cane and sugar production for the first half of May. A survey by S&P Global Commodity Insights anticipates a 6.3% year-on-year increase in sugar production, totaling 2.7 million tons.
- August white sugar (LSUc1) rose by 1.4% to $553.50 per ton.
France reported a production of 4.2 million metric tons of white sugar for the 2023/24 season, marking a 5.8% increase from the previous season but still 1% below the average of the past four seasons.
COCOA
- July London cocoa (LCCc1) advanced by 261 pounds, or 3.8%, to 7,080 pounds per ton.
Market participants noted that the cocoa market continues to be supported by a decline in production in the Ivory Coast, the top cocoa producer. Port arrivals in the Ivory Coast are down 29% compared to the same period last season. Furthermore, a lack of rain in most of the country’s main cocoa regions last week could adversely affect the development of pods expected to be harvested during the April to September mid-crop.
- July New York cocoa (CCc1) increased by 5.9% to $8,780 per ton.
These market movements reflect the ongoing influence of weather conditions and production dynamics in major agricultural commodities.