LONDON: Raw sugar futures on ICE rose on Wednesday, extending a rebound from Monday’s 5-1/2-month low as oil prices headed higher, while arabica coffee hit a one-month peak.
March raw sugar rose 1.2% to 18.32 cents per lb at 1536 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,” Rabobank said 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 after the recent lows but noted that 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 remains expensive, the CovrigAnalytics consultancy said.
March white sugar rose 2% to $499.70 a tonne.
March arabica coffee rose 2% to $2.4180 per lb, having hit a one-month peak of $2.4370?.
Dealers said that lower exports and lower stocks at destination ports are continuing to highlight supply tightness in the coffee market.
The International Coffee Organization noted that coffee exports from top producer Brazil plunged more than 30% year on year in October and November.
“The unfavourable weather last year (in Brazil) is likely to continue having after-effects,” Commerzbank said in a note. March robusta coffee rose 0.6% to $2,281 a tonne.
March New York cocoa fell 1% to $2,561 a tonne, having hit its highest since mid-December on Tuesday at $2,604/tonne. March London cocoa fell 0.6% to 1,706 pounds per tonne.
No. 2 cocoa producer Ghana’s cocoa arrivals from the start of the season to Jan. 6 were down 53.9% year on year, data showed.