Cocoa prices have continued to tick up from the one-year lows seen last week, underpinned by worries over possible damage to the mid-crop in parts of Côte d’Ivoire and Ghana following the seasonal Harmattan wind. The countries are the world’s biggest cocoa bean producers.
Cocoa for May delivery on New York’s ICE reached $2,919 a tonne by settlement on Feb. 12, having earlier in the day hit a three-week high of $2,922 a tonne. In London, May cocoa climbed to finish at £1,987 a tonne, a more than £58 gain on last week’s finish. The cocoa price in New York has gained now more than 9 percent and London cocoa some 6 percent since the start of February.
Arabica coffee prices though tumbled to their lowest level in almost a year this week as the market re-assessed its expectations for supplies as recent rains in the main coffee-growing regions of top producer, Brazil support a better harvest than had been earlier expected.
Arabica coffee for March delivery settled at $1.5940 a pound on the ICE Futures U.S. exchange on Feb. 10, after earlier dipping to $1.5880, and finishing 8.20 cents down on the day on Feb. This settlement marked the lowest close since Feb. 18, 2014.
Before the arrival of the recent rains, there had been widespread concern that the severe drought and high temperatures that had persisted across much of central and southern Brazil early last year had not only badly impacted the 2014 arabica harvest but threatened this year’s harvest, which is set to begin April-May time.
While Brazil’s 2015 coffee production is projected to come in 2.7 percent lower than the 2014 drought-hit harvest at 43.9 million 60-kg bags, the downturn is in fact on account of a lower robusta crop, the Brazilian Institute of Geography and Statistics (IBGE) said in its latest monthly report, released Feb. 12.
The arabica crop this year is expected to grow by 0.8 percent to 32.2 million 60-kg bags from last year, the IBGE reported. Robusta coffee production, on the other hand, is forecast to fall 11.3 percent year-on-year to 11.7 million bags.
Last year, there was a drastic fall in production of arabica coffee due to the exceptionally hot, dry weather conditions especially in the south of Minas Gerais and São Paulo states, the IBGE noted. “This year, the rains returned in some regions, even though they were still below the historical average and well below the needs of the crops,” it said.
Meanwhile, Brazil’s coffee export association, CeCafe, reported Brazil’s shipments of unroasted coffee beans rose 11 percent in January to 2.77 million bags. The increase was driven mainly by a tripling of sales of the cheaper robusta coffee beans. Arabica exports increased by 2.3 percent from a year earlier.
On Feb. 12, robusta coffee for March delivery in London settled $46 up on the day at $1,988 a tonne, marking a $55 gain on the week to date.
Raw sugar futures on ICE traded higher this week, with the nearby contract – currently March -buoyed by a firmer Brazilian real and demand for nearby supplies. March ICE raw sugar settled 0.33 cents up on the day at 15.04 cents a pound on Feb. 12, after touching a two-week high of 15.05 cents. The March raw sugar contract, which expires on Feb. 27, fell to a one-month low of 14.10 cents a pound on Feb. 2.
May white sugar futures finished at $391.20 a tonne on London’s ICE Futures Europe exchange on Feb. 12, up $6 on the day after earlier coming under pressure from a stronger U.S. dollar. May white sugar closed last week at $383.60 a tonne.
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