March 20, 2020 / 3:06 PM / 8 days ago

SOFTS-Arabica coffee soars, sugar also closes up on demand pickup

(Recasts, updates prices, adds details and comments)

NEW YORK/LONDON, March 20 (Reuters) - Arabica coffee rose strongly for a third consecutive day as dealers noted strong physical demand with roasters seeking to secure supplies amid worries about potential supply chain disruptions over the coronavirus outbreak.

Raw sugar futures on ICE also closed up after rising by about 5% earlier in the session.

COFFEE

* May arabica coffee closed up 7 cents, or more than 6%, to $1.1970 per lb, the highest price since March 3, after having gained 4% on Thursday.

* Dealers said that uncertainty regarding the supply chain as a result of precautionary measures amid the coronavirus outbreak was causing a pickup in demand with roasters and retail companies trying to secure supplies.

* “The markets are operating in an environment that is an analogue to a World War. Thank God we are not shooting each other,” said Michael J. Nugent, President of hedging advisory firm M.J. Nugent & Co.

* “All this physical dislocation is impacting people’s ability to move coffee... It is all up in the air,” he said.

* Speculators increased their net short position in arabica coffee on ICE by 2,365 contracts to 3,820 contracts in the week to March 17.

* May robusta coffee closed up $28, or 2.3%, to $1,244 a tonne.

SUGAR

* May raw sugar ​​settled up 0.32 cents at 10.91 cents per lb, having hit its lowest since September 2018 on Thursday.

* A dealer said that sugar would continue to rise in the short term, given that it is massively oversold, though a sustained rally is unlikely given the macroeconomic uncertainty.

* Line-up data from India and Brazil show strong exporting volumes, sugar trader Czarnikow said.

* Higher offtake linked to household usage was also noted.

* May white sugar gained $6.50 to $344.40 a tonne, having hit its lowest since last November on Thursday.

COCOA

* May New York cocoa ​​settled up $14, or 0.6%, to $2,230 a tonne, having hit a six-month low on Thursday.

* May cocoa could stabilise around support at $2,222 a tonne and bounce towards $2,305, technical signals indicate.

* Dealers are concerned that chocolate consumption could suffer because of the coronavirus, while cocoa grinders could use up their plentiful stockpiles and place reduced orders for beans.

* May London cocoa ​​settled up 19 pounds, or 1.0%, to 1,832 pounds per tonne​. (Reporting by Maytaal Angel and Marcelo Teixeira Editing by David Goodman, Kirsten Donovan and Diane Craft)

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