(Bloomberg) -- Coffee prices in New York rose for the first time in four sessions, as the commodity began to recover from a broader selloff in financial markets.
March arabica futures climbed as high as 2.3% to $2.384 a pound, after a 2% loss on Monday. Robusta prices also rebounded.
The market seems to be recovering from a risk-off mood amid rising geopolitical tensions between Russia and Ukraine and a Federal Reserve meeting this week, with expectations of an aggressive tightening cycle. Risk aversion in recent days has led investors to favor safer-haven assets like the U.S. dollar. That has also caused commodities priced in the currency to be relatively more expensive.
Arabica prices have surged in the past year on concerns about supply shortages. Traders are watching rains in Brazil, the world’s largest supplier with Somar Meteorologia data showing that the country’s biggest arabica growing region received below normal levels in the past week.
“The fundamentals remain constructive to the upside, but the macro headwinds may halt any sizable reversals for the short term,” Alex Boughton, a coffee futures and options broker at Sucden Financial Ltd., said in a research note.
In other soft commodities, futures for raw sugar declined 0.3% by 8:36 a.m. in New York. Cocoa and cotton prices rose.
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