A punishing drought in Brazil has sent the prices of sugar and coffee soaring, and some analysts expect the cost of the popular morning stimulant to continue its climb.
May Arabica coffee futures traded on the Intercontinental Exchange (ICE) have risen 69 percent since hitting a four-year low in November, and on Monday rallied to $1.7635 per pound, its highest level since October 2012. Raw sugar contracts traded on the exchange, meanwhile, saw their biggest one day rally of 4.1 percent in nearly five months on Monday, jumping to 17.41 cents a pound.
Jonathan Barratt, chief investment officer at Ayers Alliance, told CNBC Asia's "Squawk Box" on Monday that extreme weather conditions in Brazil and India have dramatically altered the supply/demand dynamic in the global coffee and sugar markets.
"Coffee and sugar - in fact all soft commodities - are looking good. We can expect surpluses to be sucked up and prices to go higher," said Barratt.
Brazil, the world's leading exporter of coffee and sugar, along with soybeans, orange juice and beef, has faced its worst drought in history in recent months, wiping out farmers' crops and leaving six million people with rationed water supplies across 11 Brazilian states. This January was the country's driest in six decades.
Extreme weather in India, meanwhile, has also impinged on global sugar production, after five cyclones hit the eastern coast of the country last year shutting down several sugarcane factories. Last week the International Sugar Organization warned that global output could fall for the first time in five years in 2014.
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Ayers Alliance's Barratt told CNBC that there was further upside to come.
"If we get no break in the weather, $2.20 per pound is the next level in coffee and for sugar, 19.50 cents a pound. I remember in 2011, coffee was trading at $3.00 and sugar was at 35 cents, so any major disturbance to supply we expect more gains to come," added Barratt.