LONDON: Raw sugar futures rose sharply on Tuesday, climbing to a seven-week high, as funds added to long positions against the backdrop of declining crop prospects in the European Union and Brazil.
May raw sugar was up 0.33 cents, or 2%, at 16.62 cents per lb by 1417 GMT after peaking at 16.88 cents, its highest since Feb. 26.
Dealers said the market continued to derive support from diminished crop prospects in the European Union with heavy frost-related losses in France.
Dry weather in Centre-South Brazil is also seen reducing production in the region while price charts appear more bullish after the market’s recent strong performance.
Brazilian sugar production should fall sharply in the new season that started in April, as unfavorable weather continues to hurt sugar cane growth across the center-south region, commodities trader Wilmar said on Tuesday.
August white sugar rose by $8.50, or 1.9%, to $462.50 a tonne.
July New York cocoa fell by $52, or 2.1%, to $2,440 a tonne.
Dealers said this season’s global surplus was weighing on prices with exchange stocks climbing recently for the New York and London contracts.
The selling of New York and buying of London was also noted with the former market’s premium widening sharply this month to a level which some believe is hard to justify given the recent rise in exchange stocks in New York. July London cocoa fell by 11 pounds, or 0.7%, to 1,624 pounds a tonne.
July arabica coffee rose by 2.25 cents, or 1.7%, to $1.3415 per lb, advancing towards last week’s one-month high of $1.3545.
Dealers said the market was supported by an expected tightening in supplies over the next few months with production in Brazil set to fall in the 2021/22 season, an off-year in the country’s biennial crop cycle.
July robusta coffee rose by $14, or 1%, to $1,399 a tonne.
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