LONDON: Raw sugar futures on ICE were higher on Friday, boosted partly by tax changes in Brazil which could make it more attractive to use sugar cane to produce ethanol.
SUGAR
October raw sugar rose 0.10 cents, or 0.69 percent, to 14.51 cents per lb by 1133 GMT.
Dealers said news that Brazil will raise its federal fuel taxes was supportive with the move set to widen the difference between gasoline and ethanol prices.
"That makes ethanol more competitive," said Carlos Mera, senior commodities analyst at Rabobank. "Which means mills - more likely towards the end of the season - are likely to produce more and more ethanol."
An increase in the use of sugar cane to produce ethanol would curb production of sugar.
Dealers said the market had been supported this week by talk that a cold snap had caused some crop damage in Brazil.
"The frost was very localised... it provided some support to the market but nothing too significant to be honest," Rabobank analyst Mera said.
October white sugar was up $3.40, or 0.86 percent, at $398.90 a tonne.
COFFEE
September arabica coffee rose 0.05 cent, or 0.04 percent, to $1.3505 per lb. The contract is on track for a fourth consecutive weekly gain.
Dealers said short covering by speculators had helped to fuel the run-up this week and CFTC data issued later on Friday should show a reduction in their net short position.
"The short covering rally has run out of steam a little bit but I don't necessary think that (upward) move is entirely over," one dealer said.
September robusta coffee rose $23, or 1.09 percent, to $2,136 per tonne.
"We've had a bit of a pop to the upside. I think it is just thin conditions and if someone wants to buy you are going to move the market," one dealer said.
COCOA
December London cocoa fell 4 pounds, or 0.26 percent, to 1,560 pounds a tonne with the market consolidating after rising earlier in the week.
Dealers also noted North American grind data came in towards the lower end of expectations.
North American cocoa grindings fell slightly in the second quarter of 2017, data from the National Confectioners Association (NCA) showed on Thursday.
December New York cocoa was down $8, or 0.40 percent, at $1,985 a tonne.
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