BRASÍLIA: ICE robusta coffee hit a fresh 4-1/2 year high on Tuesday, lifted by prospects for a smaller crop in Brazil due to poor weather, while London cocoa fell on a stronger pound. March robusta coffee rose $15, or 0.67 percent, to $2,248 a tonne by 1521 GMT, near an earlier high of $2,259. “The robusta market is obviously very bullish,” a dealer said. “The weather is also very dry in Espirito Santo, which is bad for the upcoming Brazilian crop.”
The country’s 2017 coffee crop is expected to be between 43.65 million and 47.51 million 60-kg bags, compared with 51.37 million last year, Conab said on Tuesday in its first projection for the new coffee crop. The robusta output is expected at 8.64 million to 9.63 million bags in 2017, higher than the 7.98 million produced in 2016 but below typical production. Robusta futures have rallied on worries over poor crops in Brazil, which could push up domestic prices and prompt the government to allow imports. “If they do, that will be very positive for the robusta market,” the dealer said. March arabica coffee futures were up 0.45 cents, or 0.30 percent, to $1.4975 per lb. The March London cocoa contract was down 10 pounds, or 0.56 percent, to 1,782 pounds per tonne. The London cocoa market was hit by a strong pound – on track for its biggest one-day gain since 1998 on Tuesday, following Prime Minister Theresa May’s promise of a parliamentary vote on Britain’s deal to leave the EU.
The market also continued to monitor the Ivory Coast, where the government began paying bonuses to soldiers as part of a deal agreed to end an army mutiny earlier this month. News also emerged that the country’s Coffee and Cocoa Council (CCC) marketing board plans to cancel around 300,000 tonnes of cocoa export contracts on the verge of default and resell them. Exporters will pay 10 cfa per kg in penalties on cancelled contracts, with more sanctions to follow. March New York cocoa rose $2, or 0.09 percent, at $2,215 a tonne. March raw sugar contract rose 1.27 percent or 0.26 cent to 20.78 cents per lb, while March white sugar was up $5.30, or 0.99 percent, at $539.30 per tonne. But one dealer said gains will likely be capped by lack of clarity around India, where rising domestic prices have triggered speculation that the government may be forced to slash its import tax. “Decisions by India are notoriously slow, and I don’t think we’re going to get any kind of clear direction for weeks and weeks,” he said. “So I think the market is playing a wait-and-see game here.”
