LONDON: Raw sugar hit a 1-1/2 month high on Wednesday on sustained concerns of a cane shortage in India, the world's second-largest producer, while coffee jumped on currency strength in major producers Vietnam and Brazil.
ICE front-month raw sugar futures rose to 20.92 cents per lb, the highest since Nov. 16. They traded down 0.04 cent, or 0.2 percent, at 20.47 cents by 1418 GMT.
Over two dozen mills in Maharashtra, India's top-producing sugar state, have stopped crushing due to cane shortages and many more are likely to shut before the end of February, a producers' body said on Tuesday.
"It's quite a fundamental issue It was expected but the (India) report reinforced these expectations.
I don't see any reason for profit taking today, we expect prices to stay around 20-21 cents per pound for the quarter," said Rabobank analyst Carlos Mera.
In demand side news, Indonesia said it would import 1.5 million tonnes of raw sugar over next six months.
"It is difficult to argue that the recent rally is justified purely on Indian production concerns.
Nevertheless, the funds seem keen to re-establish a good percentage of their longs which means prices could continue to improve to 21.50/22.00," a dealer said.
White sugar futures rose $0.7, or 0.1 percent, to $543.60 a tonne, having hit a high since Nov. 16 at $551.40.
In coffee, March robusta jumped to $2,165 per tonne, its highest since mid-November, while front-month arabica was up more than 3 percent to $1,4295 per lb, its highest since Dec. 22.
Arabica was boosted by the Brazilian real, which rose 1 percent against the dollar and robusta was supported by strength in the Vietnam's currency, deterring producer selling on international dollar-denominated markets.
Vietnam is the world's top robusta producer, while Brazil is the biggest arabica grower. March robusta traded up $34, or 1.6 percent, at $2,158 per tonne at 1418 GMT, while front-month arabica rose 4.3 cents, or 3.1 percent, to $1.4165 per lb.
Robusta fell on Tuesday ahead of the Tet Lunar New Year holiday in Vietnam later this month. Farmers and exporters often sell ahead of the holiday to raise cash.
ICE March New York cocoa rose $44, or 2 percent, to $2,210 a tonne after falling to a 3-1/2 year low on Tuesday.
Cocoa finished 2016 with its biggest loss in 17 years on expectations of a global surplus.
"In all likelihood, 2016/17 year will see a large surplus. However, at these prices, we believe we are near the bottom of the market, as these levels will incentivise consumption," said Rabobank's Mera.
May London cocoa was up 26 pounds, or 1.5 percent, at 1,800 pounds per tonne.
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