Raw sugar rises, buoyed by crude oil gains; coffee, cocoa also up

• July raw sugar rose 0.19 cent, or 1.9%, to 10.65 cents per lb by 1035 GMT, having closed up 1.9% on Thursday.
• Fitch ratings said while sugar has been helped of late by a temporary rebound in the Brazilian real, it expects prices to remain under pressure near term due to coronavirus-induced demand destruction and generally weak oil prices.
• July arabica coffee rose 1.2 cents, or 1.1%, to $107.85 per lb.

LONDON: Raw sugar futures on ICE extended gains on Friday as crude oil headed higher amid easing coronavirus lockdowns, and as persistent tightness in the white sugar market drove prices for the refined sweetener sharply higher.

Coffee and cocoa also gained.

SUGAR

July raw sugar rose 0.19 cent, or 1.9%, to 10.65 cents per lb by 1035 GMT, having closed up 1.9% on Thursday.

Oil prices hit more than one-month highs amid signs demand for crude was picking in China, and rounding out a week of bullish news on the supply front.

Sentiment improved in the wider financial markets also, taking the sting out of a week that has seen deteriorating US-China relations and worries over how fast economies could recover from the coronavirus shock.

Weakness in energy prices has led to mills in Brazil raising sugar output at the expense of cane-based biofuel ethanol, while a weak Brazilian real has boosted exports by raising the value of dollar-priced sugar sales in local currency terms.

Fitch ratings said while sugar has been helped of late by a temporary rebound in the Brazilian real, it expects prices to remain under pressure near term due to coronavirus-induced demand destruction and generally weak oil prices.

The European Commission is seeking to halve the use of pesticides by 2030 to halt the decline of insects that pollinate crops. Some farming groups said a wide ban could cause crop yields like sugar beet to fall.

August white sugar rose $8.30, or 2.3%, to $363.30 a tonne, having hit its highest level since early January.

The premium for front month white sugar over front month raws was last at $128.81 a tonne, its highest since 2013 and tempting refiners to buy more raws for processing.

COFFEE

July arabica coffee rose 1.2 cents, or 1.1%, to $107.85 per lb.

Dealers continued to keep a close watch on possible harvest delays in South America, although the recent weakness of Brazil's currency, the prospect of a large Brazilian crop and flailing demand remain bearish influences.

July robusta coffee rose $11, or 0.9%, to $1,179 a tonne.

COCOA

July New York cocoa rose $14, or 0.6%, to $2,401 a tonne.

Ghana's graded and sealed cocoa arrivals stood at 698,000 tonnes as of April 16 since the start of the season on Oct. 1, down from 718,000 tonnes the previous season, official figures showed.

Nigeria's cocoa mid-crop output is expected to be weak as measures to curb the spread of the coronavirus hindered farmers and exporters, the president of the cocoa association said.

July New York cocoa may test a support at $2,378 per tonne, a break below which could cause a fall to $2,344, technical signals indicate.

July London cocoa rose 13 pounds, or 0.7%, to 1,862 pounds per tonne.