LONDON: Raw sugar futures rose to the highest level in around three months on Monday boosted by fund short covering against the backdrop of a switch to use more cane in Brazil to produce ethanol rather than sugar.
SUGAR
March raw sugar rose 0.15 cents, or 1.0 percent, to 14.78 cents per lb by 1425 GMT, after earlier hitting 14.82 cents, the highest for the spot contract since Aug. 3.
Dealers noted speculators had been reducing a large net short position in raw sugar.
Brazil mills have also increased the amount of cane used for ethanol production this month and reduced sugar output.
"Relatively stronger ethanol prices will help absorb a portion of the sugar surplus that the market is forecasting for the next season," ING said in a market note.
Global supplies, however, remained ample ahead of the Thai harvest, with the country potentially poised for stronger sugarcane output in 2017/18 than previously expected.
"Higher sugarcane prices in the last season are likely to have increased the area under sugarcane cultivation," Tropical Research Services said in a market update, noting above-average rains had also been beneficial to yields.
December white sugar was up $3.40, or 0.9 percent, at $384.30 a tonne.
COCOA
December London cocoa fell 18 pounds, or 1.1 percent, to 1,555 pounds a tonne.
Dealers said prices remained well within the recent trading range.
Cocoa arrivals at ports in top grower Ivory Coast had reached around 168,000 tonnes by Oct. 29 since the start of the season on Oct. 1, exporters estimated on Monday, down from 206,000 tonnes at the same point last year.
December New York cocoa slid $34, or 1.6 percent, to $2,081 a tonne.
COFFEE
December arabica coffee fell 0.55 cents, or 0.4 percent, to $1.2605 per lb, with the market consolidating after Friday's short-covering rally.
November robusta coffee fell $7, or 0.35 percent, to $1,978 per tonne.
Vietnam's coffee exports are expected to have fallen an estimated 22 percent in the first 10 months of this year from a year earlier, the General Statistics Office said in a report on Sunday.
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