LONDON: Raw sugar futures on ICE hit their highest in 2-1/2 months on Tuesday, jumping above 18 cents per lb on continued concerns over top producer Brazil’s cane crop and a stronger Brazilian real.
July raw sugar rose 3.3% to 18.07 cents per lb by 1522 GMT.
Dealers cited concerns about the Brazilian cane crop and that end users have not bought enough sugar to cover their needs, meaning they are likely to buy into dips.
Also boosting sugar, the Brazilian real rose versus the dollar, deterring farmers and exporters from selling by lowering returns in local currency terms.
August white sugar rose 2.9% to $479.40 a tonne.
July arabica coffee rose 2.1% to $151.15 per lb, having climbed to a four-year peak of $1.5540 last week.
Dealers said arabica has gone up too high too fast and is set to pull back to $1.40 this week, with dry conditions in Brazil actually necessary at this time of year to maintain quality for the harvest’s natural drying process.
But they said that improved demand spurred by countries emerging from coronavirus lockdowns should underpin prices, as well as reduced supplies out of Brazil after adverse weather last year when the crop was developing. July robusta coffee rose 0.9% to $1,532 a tonne.
July London cocoa fell 1.3% to 1,646 pounds per tonne.
A drop in electricity generation in top cocoa producers Ivory Coast and Ghana has hit households and businesses, with the situation only expected to return to normal around July.
The outages in Ivory Coast have led to complaints from the cocoa sector, which depends on steady power supply for its grinding machines. Two industry sources said that most cocoa grinders were operating at between 25% and 50% of capacity.
July New York cocoa fell 1.6% to $2,474 a tonne.