At 15 feb trading, rabica coffee futures pushed
through a new 13-3/4-year, and robustas hit a
multi-year peak as investment fund buying and tight supplies of
high-quality beans boosted prices.
Cocoa futures on ICE retreated but stayed just below their
one-year top on uncertainty about whether an export ban in top
grower Ivory Coast would be extended. Sugar fell further from
near 30-year peaks.
"Coffee tenderable in New York isn't in good supply due to
the weather problems in Colombia and Central America over the
past few months," a UK-based analyst said. "Plus dollar weakness
and fund buying have helped push prices higher.
May robusta coffee on Liffe LRCc2 climbed to $2,318 a
tonne, its highest since July 2008, before easing slightly to
trade up $22 or 1 percent at $2,305 per tonne.
Arabica prices have more than doubled since mid-2010 as
Colombia, the top producer of washed arabicas, entered its third
year of below-trend harvests, and as top grower Brazil begins an
off-year in its biennial crop cycle.
"Coffee prices are reflecting exactly what people see as the
fundamentals in the market going forward," said Kona Haque, an
analyst at Macquarie Bank. "With Brazil's off-year, the truck
drivers' strike in Colombia and the Central Americans all
suffering from too much wet weather, we didn't see the kind of
boost in production that you'd expect with the high prices.
"We're just seeing the supply pipeline getting squeezed."
Dealers said renewed roaster demand also helped sustain the
coffee market rally as roasters were forced to cover positions
once they realized coffee prices were not going to fall.
Robusta prices in the domestic market of Vietnam, the
world's second-largest producer after Brazil, jumped to an
all-time high on Tuesday, prompting some farmers to hold back on
sales in anticipation of further gains.
IN COCOA, AN IMPOSSIBLE SITUATION
Cocoa futures on ICE dipped in a technical consolidation,
but remained below Monday's one-year top, underpinned by
continued unrest in Ivory Coast, where disruptions to energy
supplies have forced some cocoa processing facilities to shut
temporarily.
Ivory Coast cocoa exporters said they feared for their
future following reports on Monday that presidential claimant
Alassane Ouattara would extend a one-month cocoa export ban if
his rival Laurent Gbagbo refuses to cede power.
"Exporters are being given contradictory instructions
between Gbagbo's regime and Ouattara's regime, and it's
extremely difficult for the exporters to know how to operate,"
said Jonathan Parkman, joint head of agriculture at Marex
Financial Ltd. "It's an almost impossible situation."
Cocoa dealers have said tougher access to credit could also
hinder the cocoa trade in coming weeks. Two large international
banks suspended operations in Ivory Coast on Monday.
The long positions would enable market participants
to take delivery of cocoa already stored in European warehouses
when the contract expires.
