Raw sugar rises as oil gains; arabica hits 1-month top
- March New York cocoa slipped 0.1% to $2,585 a tonne
- March arabica coffee rose 2.7% to $2.4350 per lb
- March raw sugar rose 0.9% to 18.27 cents per lb
LONDON: Raw sugar futures on ICE rose on Wednesday, rebounding from Tuesday's 5-1/2-month low as oil prices headed higher, while arabica coffee hit a 1-month peak.
March raw sugar rose 0.9% to 18.27 cents per lb at 1314 GMT, having hit a low of 17.60 cents on Monday.
"Brent prices have recovered to pre-Omicron levels, and that might push ethanol prices higher," said Rabobank in a note.
High ethanol prices can prompt cane mills in top producer Brazil to divert output from sugar to ethanol, a cane-based biofuel
Dealers said a sugar price recovery was perhaps inevitable following the recent lows, but noted the price drop has not unearthed much fresh physical buying.
Imports of sugar into China, one of the world's top sugar buyers, will fall sharply below last year's levels as Chinese prices slide and ocean freight stays expensive, consultancy CovrigAnalytics said.
March white sugar rose 1.4% to $496.80 a tonne.
Raw sugar rebounds from 5-1/2 month low as fund selling abates
March arabica coffee rose 2.7% to $2.4350 per lb, having hit a one month peak of $2.4370.
Dealers said lower exports and lower stocks at destination ports are continuing to highlight the coffee market tightness.
The International Coffee Organisation noted coffee exports from top producer Brazil plunged more than 30% year-on-year in October and November.
"The unfavourable weather seen last year (in Brazil) is likely to continue having after-effects," said Commerzbank in a note.
March robusta coffee rose 0.9% to $2,289 a tonne.
March New York cocoa slipped 0.1% to $2,585 a tonne, having hit its highest since mid-December on Tuesday at $2,604/tonne.
March London cocoa slipped 0.2% to 1,716 pounds per tonne.
No. 2 cocoa producer Ghana's cocoa arrivals from the season start to Jan. 6 were down 53.9% year-on-year, data showed.