Coffee prices at 47-year high on Brazil crop concerns
Updates prices
LONDON, Nov 29 (Reuters) -Coffee prices rose on Friday to their highest in nearly half a century, buoyed by tightening supplies as next year's crop in top grower Brazil struggles to recover fully from this year's drought.
Dealers also said some Brazilian farmers have delayed deliveries of this year's crop in the hope of securing even higher prices, leading to short-term supply tightness and large financial losses for traders who had been expecting to receive the coffee.
Arabica coffee futures KCc2 on the ICE exchange rose by 0.2% to $3.2360per lb by 1453 GMT, having hit their highest since 1977 at $3.3545.
Prices for arabica coffee have now risen by about 75% this year, making it one of the strongest performing commodities alongside cocoa, for which prices have more than doubled.
"The price trend is now very similar to that of cocoa at the beginning of the year. The reasons are also comparable," Commerzbank said in a note on Friday.
"In the case of cocoa, it was poor harvests in the two most important producer countries, Ivory Coast and Ghana. In the case of arabica coffee, it is concern about a poor crop in Brazil, the most important producer country, next year due to drought."
Brazilian coffee traders Atlantica and Cafebras said on Wednesday that they will negotiate with their creditors in court, noting 900,000 60kg bags of coffee promised by farmers have not been received.
The price of robusta coffee, a cheaper bean often used in instant coffee, also rose to its highest in about 47 years on Friday.
Robusta coffee futures on ICE LRCc2 peaked at $5,694 a metric ton on Friday before turning lower to stand 0.9% down at $5,479.
New York cocoa futures on ICE CCc2 were up 3.5% at $9,382 a ton after setting a five-month high of $9,459.
Cocoa prices soared to a record high of $11,722 a ton in April, with supplies tightened by poor crops in top producers Ivory Coast and Ghana.
London cocoa futures on ICE LCCc2 rose 0.6% to 7,659pounds a ton after hitting a five-month high of 7,725 pounds.
Sugar prices fell, meanwhile, with March raws SBc1 down 2.8% at 21.08 cents per lb while March whites LSUc1 lost 1.6% to $547.30 a ton.
Reporting by Nigel Hunt; Editing by David Goodman and Jonathan Oatis
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
