Cocoa rallies as supply concerns linger, arabica hits two-week high

LONDON, Aug 7 (Reuters): ICE cocoa futures rallied on Wednesday as investors remained concerned about supply tightness, while arabica coffee hit a two-week peak amid worries about top producer Brazil's crop.
December London cocoa rose 3.2 per cent to 5,600 pounds a metric ton at 1203 GMT.
Cocoa prices are expected to continue heading higher this year due to persistent supply shortages that will leave them at more than double last year's levels by the end of 2024, a Reuters poll of 12 traders and analysts showed.
Dealers noted rising premiums for September versus December contracts in both London and New York, indicating tight near-term supplies.
Refinitiv analyst Marcin Gorski said warm and dry conditions will prevail across the West African cocoa regions over the next 10 days, adding they may suffer from inadequate moisture if not enough late rains arrive in September.
December New York cocoa rose 4.2 per cent to $7,054 a ton.
COFFEE
September arabica coffee rose 2.9 per cent to $2.3960 per lb, having hit a two week high of $2.4050.
Dealers cited dry, hot weather in Brazil in recent weeks, which has reduced the quality of the current harvest and brought forth worries about next season's crop.
Brazilian co-operative Cooxupe, the country's largest coffee exporter, has changed its view on this year's coffee crop and now expects a year-on-year decline in the area where it operates.
Still the country's exports to date have been strong. Brazilian green coffee shipments rose to 202,266 metric tons in July versus 140,454 a year ago, government data showed.