LONDON: Raw sugar futures on ICE fell on Thursday after earlier hitting a three week high, with losses seen as limited given several bullish factors have combined to bolster crude oil prices at present.
High energy prices tend to prompt cane mills in Brazil to ramp up cane-based ethanol output at the expense of sugar.
March raw sugar was down 0.3% to 19.02 cents per lb at 1235 GMT. The contract earlier hit 19.18 cents, its highest since late December.
Dealers said crude oil looks unlikely to drop much from current levels and may well improve further, meaning sugar is set to remain firm near term and will only see resistance above 19.30 cents.
They noted also that several analysts are marking down production of sugar in China, a key consumer, due to lower planted beet area and cold weather.
March white sugar rose 0.2% to $511 a tonne.
March arabica coffee was down 0.5% to $2.4325 per lb at 1236 GMT, having hit its highest since early December at $2.4500.
“It seems the export backlog (in Brazil) due to the limited availability of containers and a truck driver strike has been resolved,” said Commerzbank in a note, citing figures from export association Cecafe.
The bank added, however, that arabica remains underpinned by very tight supply in top producer Brazil, leaving prices within striking distance of December’s ten year high.
March robusta coffee fell 0.6% to $2,211 a tonne, having hit a two month low of $2,184 earlier this week.
March London cocoa slipped 0.2% to 1,760 pounds per tonne.
Dealers said top cocoa producer Ivory Coast showed up in the market once again on Wednesday, resulting in hedging pressure. March New York cocoa was little changed at $2,658 a tonne.