Adds comment, updates prices
LONDON, Jan 7 (Reuters) – ICE arabica coffee futures rose sharply on Friday, boosted by concerns about the outlook for Brazil’s crop and declining exchange stocks, while raw sugar slid to a five-month low.
COFFEE
* March arabica coffee KCc1 was up 3.4% at $2.3950 per lb by 1448 GMT.
* Dealers said the outlook for this year’s crop in top producer Brazil remained a central focus with drought and frosts in 2021 denting prospects and concern that recent rains had been excessive in some areas.
* Severe rains have flooded coffee fields and other crops in central eastern areas in Brazil, the latest in a climate roller-coaster for the nation’s agricultural regions.
* Falling exchange stocks remained a supportive factor.
* Certified ICE arabica coffee stocks were at 1.52 million bags as of Jan. 6, down from 1.60 million a month earlier.
* “At this rate, it’s not inconceivable to see 1 million or less by summer … this should in turn lead to a more inverted market which will also encourage funds to continue to position from the long side,” Cardiff Coffee Trading said in a report.
* A drop in exchange stocks reduces the amount of coffee which can be tendered and can lead to nearby months trading at significant premiums to more distant positions.
* March robusta coffee LRCc2 rose 1.6% to $2,343 a tonne, climbing towards a 10-year high of $2,384 set in late December.
SUGAR
* March raw sugar SBc1 was 0.3% lower at 18.14 cents per lb after falling to a five-month low of 18.06 cents.
* Dealers said an improving outlook for cane production in Brazil following recent rains had helped to put the market on the defensive.
* Cane harvests in India and Thailand have also started well and production in both countries could potentially be slightly higher than expected.
* March white sugar LSUc1 rose 0.02% to $486.20 a tonne.
COCOA
* March New York cocoa CCc1 was up 2.1% at $2,473 a tonne, rebounding from the prior session’s two-month low of $2,408.
* March London cocoa LCCc1 rose 2.1% to 1,687 pounds a tonne.
(Reporting by Nigel Hunt; editing by David Evans, Kirsten Donovan)
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