LONDON: Raw sugar futures rose to a seven-week high on Wednesday, boosted by the prospect of tightening supplies as crop outlooks in Brazil and Europe were downgraded.
May raw sugar was up 0.09 cents, or 0.5%, at 16.86 cents per lb by 1358 GMT after peaking at 16.89 cents, its highest since Feb. 26.
Dealers said a diminished crop outlook in Brazil had helped to fuel the recent run-up in prices along with crop concerns in the European Union.
Commonwealth Bank of Australia analyst Tobin Gorey said the market was increasingly focussed on too dry weather in the Center-South Brazil region for significant periods of the last six months or so.
“We can see why people are worried about Brazil’s cane. We are a little disturbed though about the sudden interest in the matter now. The recent dryness in those regions is perhaps unhelpful but the dry periods late last year are the major worry,” he said.
August white sugar rose by $0.70, or 0.15%, to $462.80 a tonne.
July New York cocoa rose by $26, or 1.1%, to $2,445 a tonne.
Dealers said the market had clawed back some of the prior session’s steep losses with industry buying underpinning prices.
Supplies remain ample, however, with a global surplus is widely projected for the 2020/21 season.
July London cocoa rose by 32 pounds, or 2%, to 1,646 pounds a tonne.
July arabica coffee was unchanged at $1.3445 per lb.
Dealers said the market was likely to consolidate in the short-term after climbing to a one-month high of $1.3545.
They noted sentiment remained generally constructive boosted by an expected tightening in supplies over the next few months as Brazil harvests a smaller crop in the off-year in its biennial crop cycle.
July robusta coffee rose by $5, or 0.4%, to $1,403 a tonne.
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