Raw sugar futures on ICE rose on Friday, boosted by tightening supplies and broad-based gains in commodity markets, while cocoa fell as rains improved the crop outlook in West Africa. May raw sugar was up 0.22 cents, or 1.9%, at 11.84 cents per lb by 1455 GMT, rebounding from a 5-1/2 month low of 11.53 cents set on Thursday.
Dealers said the strength of the premium of white over raw sugar indicated demand may be holding up well. Whites can react more quickly to demand trends as the sugar is ready to be consumed while raws have to be refined. Nearby premiums on both raw sugar and white sugar also provide evidence the physical market is reasonably tight.
There remained concern that lower gasoline prices could curb demand for ethanol in Brazil, prompting mills to switch to using more cane to produce sugar. Dealers said the volatility in crude oil prices, however, means the extent to which sugar production in Centre-South Brazil will rise remains unclear.
"The extra sugar production the drop in oil prices buys though is still notional - and that can still change," Commonwealth Bank of Australia analyst Tobin Gorey said. May white sugar rose $4.80, or 1.4%, to $358.90 a tonne.
May New York cocoa fell $60, or 2.4%, at $2,435 a tonne after setting a 2-1/2 month low of $2,432. Dealers said rains in Ivory Coast had improved the outlook for the mid-crop and added to downward pressure on prices.
"The upturn in rains will continue to improve moisture and will favour main crop flowering and mid-crop growth, although more rains will likely still be needed in northern belt areas," weather forecaster Maxar said in a daily update. May London cocoa was down 25 pounds, or 1.3%, at 1,844 pounds a tonne. May arabica coffee fell 0.5 cents, or 0.5%, to $1.0835 per lb.
The market was underpinned, however, by tightening supplies with exchange stocks continuing to decline and premiums for washed arabica coffee in the physical market rising. May robusta coffee was up $5, or 0.4%, at $1,254 a tonne.
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