LONDON: Raw sugar futures on ICE rose on Tuesday, buoyed by crude oil price strength that could lead to more cane being used to make biofuel ethanol rather than sugar.
March raw sugar rose 2.2% to 18.71 cents per lb by 1510 GMT.
Benchmark oil prices climbed to their highest since 2014 on Tuesday as possible supply disruption after attacks in the Mideast Gulf added to an already tight supply outlook.
Dealers said, however, that improving sugar production outlooks for Thailand and India should help to keep a lid on prices. March white sugar rose 0.5% to $510.70 a tonne.
March arabica coffee fell 0.5% to $2.3850 per lb.
Dealers said they were keeping a close watch on whether there is a significant rise in Brazilian production this year, an on-year in the country’s biennial crop cycle.
Brazil government crop agency Conab on Tuesday forecast coffee output would climb by 16.8% to 55.7 million 60kg bags. The agency said, however, that world coffee stocks would fall in 2021/22, keeping prices high even though production in Brazil is poised to rise.
March robusta coffee fell 0.9% to $2,198 a tonne.
March London cocoa rose 0.3% to 1,784 pounds a tonne, edging up towards the previous session’s three-month high of 1,790 pounds.
Dealers were awaiting cocoa grinding data, covering the fourth quarter of 2021, which should provide further evidence on the extent to which demand is rebounding after dipping in the early stages of the COVID-19 pandemic.