Sugar rallies amid renewed energy price spike, robusta coffee recovers

LONDON: Sugar futures on ICE rallied on Tuesday as oil prices resumed gains after Iran renewed attacks on energy facilities in US-aligned Gulf countries, while robusta coffee prices recovered.

SUGAR

Raw sugar rose 1.8percent to 14.44 cents per lb at 1237 GMT, having lost 1.9percent last week. Rising energy prices are bullish for sugar as they can prompt cane mills in top grower Brazil to cut output of the sweetener and instead produce more ethanol, a cane-based biofuel. Against that, however, dealers say there is commercial selling waiting at the 14.50 cent/lb level, which is functioning as a near-term ceiling.

White sugar rose 2percent to USD421.90 a metric ton.

COFFEE

Robusta coffee rose 0.9percent to USD3,506 a ton, after setting a seven-month low of USD3,415 on Monday. There are reports exporters in top robusta producer Vietnam are wary of buying as some shipping lines are loath to take on new bookings given the disruption to global shipping caused by the US-Israel war on Iran.

Overall though, dealers say farmers are not yet panic selling and note that the conflict is, if anything, bullish for prices because it increases energy, transport and fertiliser costs quite significantly. Arabica coffee rose 1.9percent to USD2.9825 per lb, after touching a near two-week low on Monday.

COCOA

London cocoa fell 0.8percent to 2,518 pounds a metric ton, following a 4percent gain the previous week. Cocoa arrivals at ports in top grower Ivory Coast from the season start to March 15 were down 3.1percent versus the same period a year ago, exporters estimated. New York cocoa fell 0.4percent to USD3,471 a ton.