By Julie Wernau

Coffee prices rose Tuesday on concerns that dryness in Brazil could continue to impact coffee crops.

Arabica coffee for March delivery was up 2% at $1.471 a pound on the ICE Futures U.S. exchange, on track for its second straight session of gains.

Brazil is the largest coffee producer in the world, and rainfall in areas growing the mild flavored arabica bean have been 60% below normal so far this month, and 97% below normal in areas that grow robusta coffee, typically used in instant coffee blends, according to WeatherBELL Analytics in New York.

Traders have been closely watching export data in Brazil for signs of a shortage of beans after dryness impacted crops last year.

P&A, a trader and consultant to the coffee business, said an informal survey carried out in the robusta growing region of Espirito Santo is showing that robusta is still available to the market despite a request from the Brazilian Coffee Roasters' Association to import robusta for the domestic market.

"Brazilian robusta premiums have surged to reflect the smaller crop, but this doesn't mean there isn't other coffee to go around," said Judith Ganes Chase, president of commodities research firm J. Ganes Consulting LLC of New York.

She pointed to higher exports from Vietnam in November that helped compensate for reductions in Brazil, and a recent bi-annual report from the U.S. Department of Agriculture that upwardly revised several seasons of coffee production.

Still, the Roast and Ground Coffee Industry Association of Espirito Santo has warned that the effects of drought could continue to impact production for two years, even with normal rainfall. Traders are awaiting the results of an official survey by CONAB, Brazil's crop supply agency, for further indications for the size of the 2017-18 crop.

In other markets, raw sugar for March was up 0.2% at 20.47 cents a pound, cocoa for March rose 1% to $2,206 a ton, frozen concentrated orange juice for March was up 1% at $1.81 a pound and March cotton jumped 0.7% to 73.51 cents a pound.

Write to Julie Wernau at

(END) Dow Jones Newswires

January 10, 2017 12:00 ET (17:00 GMT)

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