SOFTS-Coffee prices surge as Brazil frost damage assessed
LONDON, July 26 (Reuters) – Arabica coffee futures on ICE rose by 10% on Monday, climbing towards the prior session’s 6-1/2 year high, buoyed by concerns that strong frosts in Brazil last week may have done extensive damage to trees in the world’s top producer.
* September arabica coffee KCc1 rose 18.85 cents, or 10%, to $2.0785 per lb by 1000 GMT after peaking at $2.0795, just shy of Friday’s 6-1/2 year high of $2.0950.
* Strong frosts reported over Brazil’s agricultural regions last week hit up to 200,000 hectares (495,000 acres) of arabica coffee farms, or 11% of the total arabica coffee area in the world’s largest coffee producer.
* “The reason for the price surge is the cold snap in Brazil, which saw frost hit key arabica growing areas last week, especially in the largest coffee-growing state of Minas Gerais,” Commerzbank said in a note.
* Dealers noted there was also the potential for frost in some coffee areas later this week.
* Coffee trees are extremely sensitive to frost, which kills the leaves, forcing the plant to regrow them the next season, while severe frosts can kill trees completely.
* September robusta coffee LRCc2 rose $58, or 3.05%, to $1,957 a tonne.
* October raw sugar SBc1 fell 0.07 cent, or 0.4%, to 18.10 cents per lb.
* Dealers said lower prices for crude oil and grains exerted some downward pressure on the market while frosts in Brazil, which is also a leading sugar producer, were seen a less significant threat to sugar than coffee.
* “The fact that sugar prices responded more moderately (to Brazil frosts) is due not least to the greater frost resistance of sugar cane as compared with coffee. What is more, harvesting of this year’s crop is largely complete in the areas concerned,” Commerzbank said.
* October white sugar LSUc1 fell by $4.80, or 1.05%, to $452.90 a tonne.
* September London cocoa LCCc1 rose by 32 pounds, or 2.0%, to 1,623 pounds per tonne as the market extended its rebound from a one-year low of 1,521 pounds set on July 15.
* September New York cocoa CCc1 rose by $33, or 1.4%, to $2,354 a tonne.
(Reporting by Nigel Hunt; Editing by Kirsten Donovan)
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