Raw sugar futures on ICE rose on Wednesday towards the prior session's two-year peak, supported by tightening supplies, while coffee and cocoa prices were also higher. March raw sugar was up 0.14 cents, or 1.0%, at 14.46 cents per lb at 1446 GMT, moving back up towards the prior session's two-year high of 14.53 cents.
The market has been buoyed by tightening supplies while investment funds have also been building long positions. "Analysts around the world continue to revise up their deficit outlook for the global balance sheet," analysts Agritel said in a market note, adding harvest delays in India and Thailand were a cause for concern.
The upside, however, remained capped by the prospect that higher prices could encourage mills in Brazil to increase sugar production at the expense of ethanol. March white sugar was up $1.50, or 0.4%, to $391.30 a tonne, having hit a two-year high of $400 on Tuesday.
March arabica coffee was up 0.3 cents, or 0.3%, at $1.1520 per lb, edging away from the prior session's 1-1/2 month low of $1.1370. Dealers said the recent rise in ICE certified arabica stocks and the large volume of coffee waiting to be graded had helped to put the market on the defensive.
Rising production in Colombia has also helped to reduce supply concerns. March robusta rose $9, or 0.7%, to $1,329 a tonne. March New York cocoa rose $5, or 0.2%, to $2,660 a tonne, edging back up towards the prior session's one-month high of $2,668.
Dealers continued to keep a close watch on the weather in top grower Ivory Coast where conditions have been dry. Ivory Coast's cocoa growing regions stayed hot and dry over the past week, with farmers hoping to see one more rainfall before the end of the month to boost the cherelles growing on trees in time for the start of the new crop.
March London cocoa rose 5 pounds, or 0.25%, to 1,970 pounds a tonne after setting a contract high of 1,994 pounds boosted partly by a weak pound. Ghana's Cocoa Marketing Company (CMC) has sold 280,000 tonnes of cocoa for the 2020/21 season by Jan. 7, with prices that include a new $400 per tonne living income differential (LID), sources at CMC and the cocoa regulator said on Wednesday.
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