Raw sugar hits two-week high, London cocoa recovers
- May London cocoa rose 2.5% to 1,767 pounds per tonne
- May arabica coffee rose 0.6% to $2.4880 per lb
- March raw sugar rose 0.5% to 18.58 cents per lb
LONDON: Raw sugar futures on ICE hit a two-week high on Wednesday amid worries over the harvest in Thailand and China, and as energy prices remained elevated thanks to the Russia-Ukraine crisis.
Sugar
March raw sugar rose 0.5% to 18.58 cents per lb at 1252 GMT, its highest since Feb 9.
Oil prices retreated on Wednesday but remained near seven-year highs hit the previous session on worries Western sanctions on Russia for sending troops into eastern Ukraine could hit energy supplies.
Rising energy prices can prompt cane mills in top sugar grower Brazil to divert production from sugar to ethanol, a cane-based biofuel.
Dealers said sugar is also gaining support from recent flooding that could further disrupt the Chinese sugar harvest, and from the slowdown in the Thai harvest.
They added, however, that prices for the sweetener remained rangebound overall because selling from India persists.
May white sugar rose 0.4% to $496.40 a tonne.
Raw sugar gains as escalating Russia-Ukraine tension boosts oil
Coffee
May arabica coffee rose 0.6% to $2.4880 per lb.
Rabobank noted ICE arabica stocks, currently at 20 year lows, are likely to fall further in the short term. The bank added, however, that there are continued rains in top producer Brazil which could increase the size of next year's crop.
May robusta coffee fell 0.1% to $2,257 a tonne.
Cocoa
May London cocoa rose 2.5% to 1,767 pounds per tonne, recovering after hitting a six-week low on Tuesday.
Dealers cited industry buying and bullish macro-economic drivers like rising oil prices.
May New York cocoa rose 1.1% to $2,684 a tonne.
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