NEW YORK / LONDON: Arabica coffee futures on ICE closed nearly 2% lower on Friday, as speculators cashed in profits after a recent surge and Brazilian growers sold the contract at the price of greenback after the local currency weakened further.
Cocoa and sugar futures rallied.
December arabica coffee stabilized at 3.45 cents, or 1.7%, at $ 1.9985 a pound.
Traders said speculators sold part of their long position to cash in profits after coffee prices hit their highest level in 7 years last week.
They also noted coverage by Brazilian producers and exporters as the local currency has been trading at its lowest against the dollar since April amid economic and political turmoil in the country.
Arabica coffee drops from two-month high but stocks underpin
One of Brazil’s largest coffee processors, Montesanto Tavares Group, said stocks in the country were larger than expected and the current flowering of the coffee fields is positive and should lead to good production throughout the year. next.
January robusta coffee rose $ 6, or 0.3%, to $ 2,141 a tonne.
March London cocoa “moved up 5 pounds, or 0.3%, to 1,777 pounds per tonne.”
Dealers noted that the recent dry and sunny weather had improved production prospects in Côte d’Ivoire.
They noted, however, that demand had rebounded after falling during the COVID-19 pandemic and that much could depend on the sustainability of the recovery.
“Global demand has continued to recover strongly and therefore we expect the price to remain stable for the remainder of 2021 before increasing in 2022 and beyond,” Fitch Solutions said in a note Friday.
December New York cocoa gained $ 28, or 1.1%, to $ 2,583 a tonne.
Raw sugar for March was up 0.14 cent, or 0.7%, at 19.08 cents per pound, moving away from a three-week low of 18.82 cents set earlier this week.
Concessionaires said recent strength in energy prices provided some support, potentially leading to increased use of cane to produce biofuel ethanol in Brazil rather than sugar.
December white sugar fell from $ 0.20 to $ 500.60 per tonne.