Softs: Robusta coffee steadies near 16-year high amid Red Sea tension

Suedzucker AG

11/01/2024 17:12

(Updates prices)
       LONDON, Jan 11 (Reuters) - Robusta coffee futures on ICE
steadied on Thursday near their highest in at least 16 years as
farmers in top producer Vietnam held back supply and shipping
disruptions continued in the Red Sea, a key export route for
beans from Asia to Europe.
    
    COFFEE
    * March robusta coffee  LRCc2  slipped 0.2% to $2,944 a
metric ton at 1709 GMT, having hit a peak of $2,995 on Wednesday
- the highest since these futures started trading in January
2008. 
    * Wednesday saw the largest attack yet by Iran-backed
Houthis against commercial ships navigating through the Red Sea
on a key route between Europe and Asia that accounts for 15% of
the world's shipping traffic.
    * The disruptions are causing major delays and increased
freight rates, prompting Vietnamese farmers to further hold back
on sales and drag their feet delivering on pre-agreed sales.
    * The tactic is causing widespread fears of defaults that
would be very costly to traders and bullish for futures prices.
    * March arabica coffee  KCc1  rose 1.8% to $1.8425 per lb.
       
    COCOA
    * March London cocoa  LCCc1  rose 2.1% to 3,570 pounds a
ton.
    * UBS has cut the world's biggest chocolate maker Barry
Callebaut  BARN.S  to "sell" from "buy" on a strong increase in
cocoa prices which is set to also lift consumer prices, pushing
the firm's volume growth into mild negative territory in 2024.
    * Volume growth is a measure of demand. Cocoa prices have
been range-bound since hitting record highs late last year as
investors fear demand for the chocolate ingredient could shrink
in response to high prices.  
    * BMI, a unit of Fitch Solutions, said in note it expects
cocoa prices to soften over the course of 2024. "We do not,
however, anticipate much supply-side relief, but instead expect
a demand-side adjustment to elevated prices," it said. 
    * March New York cocoa  CCc1  rose 1.6% to $4,271 a ton.

    SUGAR
    * March raw sugar  SBc1  rose 1.7% to 21.77 cents per lb as
the market continues to consolidate after plumbing a nine-month
low of 20.03 cents last month.
    * Top producer Brazil's Centre-South sugar output rose 35%
year-on-year in the second half of December as mills extended
the crushing season amid dry weather, industry group Unica said,
adding there is not much sugarcane left now.
    * March white sugar  LSUc1  rose 1.5% to $622.00 a metric
ton. 

 (Reporting by Maytaal Angel; Editing by Alexander Smith and
David Evans)
 ((maytaal.angel@tr.com; @ReutersAngelM))