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Raw sugar futures on ICE were higher on Friday, boosted by short-term supply tightness, while arabica coffee rebounded strongly after the prior session's sharp fall.

March raw sugar was up 0.19 cent, or 1.2%, at 15.59 cents per lb at 1512 GMT.

Dealers said the market was supported by short-term supply tightness driven partly by poor crops in Thailand and India.

"There continues to be dry weather in India and Thailand, with rumours that the Thai cane crop will now be sub 80 million tonnes, down from 131 million tonnes last year. However, it does feel as though this figure keeps getting revised lower and lower," Sucden Financial broker Kim Dahan said in a note.

A weak Brazilian real has, however, led to some consolidation during the last few days below a 2-1/2 year high of 15.90 cents set on Feb. 12.

"With (the Brazil real) collapsing, one would expect the sugar market to have a bearish sentiment, but this has not been the case as there is still a more bullish consensus," Dahan added.

Brazil's real hit a new low against the dollar on Thursday.

Dealers said the expiry of the March contract at the end of next week was likely to provide a major short-term focus.

The open interest on the March contract has been falling sharply in the run-up to expiry and stood at 86,869 lots, as of Feb. 20, down 10,304 lots from a day earlier.

May white sugar rose $2.50, or 0.6%, to $422.20 a tonne.

May arabica coffee rose 4.8 cents, or 4.6%, to $1.0975 per lb as the market remained choppy. The contract had fallen by nearly 4% on Thursday.

May robusta coffee rose $14, or 1.1%, to $1,293 per tonne.

May London cocoa fell 3 pounds, or 0.15%, to 2,046 pounds a tonne although the contract remained on track for a weekly gain of about 2%.

Dealers said the market continued to derive support from deteriorating outlooks for crops in the world's top two producers, Ivory Coast and Ghana.

May New York cocoa was down $11, or 0.4%, at $2,849 a tonne.

Copyright Reuters, 2020

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