Arabica coffee extended a rally to the highest price since May 1997 on speculation that global supplies won’t satisfy demand. Sugar and orange juice declined.
The International Coffee Organization said in a report posted today on its website that a “precarious” balance between supply and demand in the global market “continues to favor firm prices.” Inventories held by exporting nations are close to a 40-year low, the group said last month. Futures have more than doubled in the past year as world crops declined.
“Everyone’s holding onto their arabica beans,” said Fain Shaffer, the president of Infinity Trading Corp., a commodities brokerage in Medford, Oregon. “The market is tight until picking starts in Brazil,” usually in May, he said.
Arabica-coffee futures for May delivery climbed 7.65 cents, or 2.7 percent, to settle at $2.9485 a pound at 2 p.m. on ICE Futures U.S. in New York. Earlier, the price reached $2.9665, the highest for a most-active contract since May 1997.
Prices may extend gains through June on “production downgrades, the decline in global stocks and supply tightness that should keep markets fearful of any disruptions,” Barclays Capital said in a report.
In the second half, prices may moderate with the market in a surplus of 2.5 million bags, Barclays analyst Sudakshina Unnikrishnan said in the report. A bag weighs 60 kilograms (132 pounds). Brazil is the world’s biggest producer.
In London, robusta-coffee futures for May delivery rose $95, or 3.9 percent, to $2,557 a metric ton on NYSE Liffe.
Raw-sugar futures for May delivery slid 0.28 cent, or 0.9 percent, to 30.42 cents a pound on ICE. The price has more than doubled since June 1 and touched a 30-year high of 36.08 cents last month.
In London, refined-sugar futures for May delivery dropped $12, or 1.6 percent, to $751.10 a ton.
Orange-juice futures for May delivery dropped 2.85 cents, or 1.6 percent, to $1.7405 a pound inNew York, after touching $1.7850 yesterday, the highest since Feb. 28.
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