SOFTS-Coffee hits multi-week highs as El Nino looms

- Coffee futures on ICE hit multi-week highs on Thursday as fears over a potentially very strong or 'super El Nino' weather pattern gather pace, while sugar futures fell.

COFFEE

  • Arabica coffee KCc2 rose 1.8% to $2.7675 per lb at 1318 GMT, having hit its highest since mid-May at $2.78.

  • Robusta coffee LRCc2 rose 1.2% to $3,665 a metric ton, having hit its highest since early March at $3,680.

  • El Niño is especially problematic for robusta as it typically brings high temperatures and reduced rains to Vietnam and Indonesia, which grow some 50% of the world's robusta.

  • In arabica meanwhile, the pattern initially brings excess rains to top grower Brazil. While these slow the harvest, they can only boost prices if they significantly damage crop quality or cause fungal disease.

  • Dealers noted heavy Brazil rains are forecast to continue coming and going over the next week to ten days.

SUGAR

  • Raw sugar SBc1 fell 0.7% to 13.75 cents per lb, having hit a near two-month low of 13.56 cents on Tuesday.

  • Energy price declines continue to pressure the market by tempting cane mills to produce less ethanol fuel and more sugar.

  • Longer term, however, there are fears El Nino will curb production.

  • China, the world's largest sugar importer, shipped in 36.8% less sugar in May than a year ago, data showed.

  • White sugar LSUc1 dipped 0.3% to $450.90 a ton.


COCOA

  • London cocoa LCCc2 ​was little changed at £3,159 a ton, having hit its highest since late May on Wednesday.

  • The market has been supported by indications the El Nino weather pattern may significantly crimp 2026/27 output in West Africa and in No. 3 producer Ecuador.

  • Dealers also noted that demand for the chocolate ingredient is showing some improvement.

  • New York cocoa CCc2 fell 1.2% to $4,186 a ton.