Arabica coffee futures posted a notable gain on Tuesday on the ICE exchange as market participants trimmed short exposure and supply concerns increased. The benchmark contract settled 13.6 cents higher, a 5.2% rise, at $2.728 per pound.
Market analysts pointed to several supply-side pressures behind the rally. StoneX coffee analyst Leonardo Rossetti said speculators who had shifted into a net short position last week may have been forced to cover some of those positions in response to growing worries about a delayed harvest in Brazil.
Heavy rain over recent days soaked coffee that was laid out to dry at farmyards in major producing regions of Brazil, the world’s top producer and exporter, and interrupted field harvesting operations. Those wet conditions, combined with a decline in certified stock levels, added to the sense of tightening availability among traders.
Robusta coffee futures also advanced, gaining 2% to settle at $3,598 per metric ton.
Sugar contracts moved higher alongside coffee. Raw sugar finished up 0.14 cent, or 1%, at 13.82 cents per pound after earlier touching a near two-month low of 13.56 cents during the session. Market participants said an initial drop in crude oil prices had placed downward pressure on the sugar market earlier in the day.
Looking further ahead, forecasts for the 2026/27 season appear more constructive for prices because an El Nino weather event is expected to curtail production. Australia’s national weather bureau issued a warning on Tuesday that an El Nino pattern has formed in the tropical Pacific and could strengthen in the second half of 2026, potentially becoming one of the strongest in seven decades.
White sugar contracts rose 1.7% to $449.90 per ton. Cocoa prices were also reported to have climbed during the session.
Summary of market moves and drivers:
- Arabica coffee up 13.6 cents to $2.728 per pound, a 5.2% increase.
- Robusta coffee rose 2% to $3,598 per metric ton.
- Raw sugar gained 0.14 cent to 13.82 cents per pound after earlier hitting 13.56 cents; white sugar up to $449.90 per ton.
- Drivers cited include short covering, rain-soaked drying yards in Brazil, lower certified stock levels, and the prospect of a strengthening El Nino.