Coffee climbed to a one-week high in New York on worries that surging energy costs and cool weather in Brazil will further threaten supplies.
Arabica futures rose as much as 1.3%, adding to Tuesday’s jump of almost 4%. There are concerns the boom in oil prices caused by the fallout of Russia’s invasion of Ukraine will add to farmers’ costs. Higher fertilizer prices and tight supplies of the nutrients risk curbing yields in top grower Brazil.
Smaller yields and supply line snarls leave little room for unfavorable crop weather. Temperatures in Brazil’s coffee regions may see cooler-than-normal conditions from May through July, though that doesn’t mean a repeat of last year’s devastating frost, according to World Weather Inc.
Arabica was up 0.8% at $2.3485 a pound in New York. In London, robusta coffee gained 0.9%.
The price gains could attract more funds back into the market.
“We may have had some fresh length re-emerge from the trend followers/specs after a period of liquidation,” said Alex Boughton, a coffee broker at Sucden in London.
In other soft commodities, raw sugar declined and cocoa was little changed in New York.
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