NEW YORK/LONDON, - Robusta futures charged up a 3-year peak Thursday as a shortage of deliverable supplies in the London coffee market stoked a rally which crossed the sea to New York arabica futures.
Sugar surged due to increased cash buying and cocoa was propped up by the violent power struggle which has virtually stopped bean exports in top cocoa producer Ivory Coast.
London's May robusta futures jumped $128 or by 5.15 percent to close at $2,615 per tonne, having hit a lifetime and 3-year top of $2,661. New York's May arabica coffee contract rose 5.55 cents to close at $2.709 a lb.
The premium of May robusta over July robusta hit $200 per tonne on Thursday, an indication of how tight the deliverable supply situation is, dealers said.
"Coffee's rally is all off London," said Jack Scoville, senior analyst with brokers The Price Group in Chicago. "That has taken New York (arabicas) up with it."
A London-based broker said the robusta situation is not helped any by the fact that the harvest of top robusta producer Vietnam is done and coffee supplies from that country are "in strong hands."
Analysts said that with the weekend coming up, the level of nervousness remained high after a killer quake and tsunami hammered Japan and the crisis has not abated due to the nuclear emergency in the Asian country.
Scoville said the Japanese disasters would continue to hang over the market through this weekend.
Sugar futures barreled higher as well, inspired by talk that cash buying has picked up especially since raws plunged from levels over 30 cents a lb to approach 25 cents.
New York's May raw sugar contract on ICE Futures
U.S. rose 0.89 cent to finish at 26.74 cents per lb. London's May white sugar futures gained $17.60 to end at $686.20 per tonne.
Dealers said though that the price risk for sugar futures was to the downside, because more of the crop than expected still awaited harvest in Thailand, and India could soon approve exports.
Also, Brazil, the world's top sugar producer and exporter, is expecting a large harvest in the main center-south growing region in 2011/12.
"The technicians are suggesting the momentum to the downside is going to increase and the bulls need the market back above 27 cents/lb more urgently," said Thomas Kujawa of brokerage Sucden Financial.
Cocoa jumped up as well, supported by the fighting which has practically eliminated cocoa bean exports from Ivory Coast.
New York's May cocoa contract rose $67 to finish at $3,282 per tonne. London's Liffe May cocoa futures added 24 pounds to close at 2,126 pounds a tonne.
As the Ivory Coast's cocoa trade has ground to a halt, some buyers have had to draw down stocks stored in Europe, with NYSE Liffe reporting a fall in the volume of certified warehouse stocks in Europe earlier this month.
NYSE Liffe reported on Thursday that 56,960 tonnes were tendered against the March cocoa contract that expired on Wednesday. The delivery was about half the 109,960 tonnes tendered on the last expiry, the December 2010 contract.-----
