Forexpros – Coffee futures rose to a one-week high on Monday, as market sentiment continued to be dominated by developments surrounding the euro zone debt crisis.
On the ICE Futures Exchange, Arabica coffee for December delivery traded at USD2.3180 a pound during European afternoon trade, gaining 0.36%.
It earlier rose by as much as 0.55% to trade at USD2.3315 a pound, the highest price since October 31.
Agricultural commodities continued to be affected by outside influences as risk appetite was boosted by speculation that Italian Prime Minister Silvio Berlusconi may be about to step down amid mounting opposition from within his own party, ahead of a key parliamentary vote on Tuesday.
The reports were subsequently denied by a spokesman for Mr. Berlusconi.
Paris-based agribusiness consulting firm Agritel said in a report earlier that, “Commodities markets are pretty quiet in comparison to the choppiness of financial markets. It seems that fundamentals are taking the upper hand on macroeconomic data on the short term at least.”
Coffee’s gains were limited as favorable weather was expected to aid coffee bean crops in Brazil, the world’s largest producer and exporter of Arabica coffee. Arabica is grown mainly in Latin America and brewed by specialty companies.
Meanwhile, Kenya’s coffee output was forecast to rise by 6% in the 2011-12 marketing season to 54,000 tonnes as farmers make additional investment in existing farms and expand to new areas to take advantage of favorable prices.
Loise Njeru, managing director of the state-run Coffee Board of Kenya said earlier, “Fundamentally the performance of the year has been good in terms of earnings and we are seeing a lot of reinvestment into coffee in terms of inputs. So that is expected to spur production.”
Kenya is a relatively small grower but its specialty beans are famous for their high quality and are much sought after for blending with coffee from other producers.
Elsewhere, on the ICE Futures Exchange, cotton futures for December delivery slipped 0.17% to trade at USD 0.9857 a pound, while sugar futures for March delivery rose 0.8% to trade at USD0.2575 a pound.
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