LONDON: Raw sugar futures rose on Wednesday, buoyed by gains in crude oil and a weaker dollar, while coffee and cocoa prices fell.
Higher energy prices can prompt cane mills in Brazil to divert output from sugar to ethanol, a cane-based fuel.
Sugar
May raw sugar rose 0.9% to 19.28 cents per lb by 1201 GMT.
Rabobank said in a note that sugar prices may need to rise further to encourage mills in Brazil to maximise production of the sweetener.
“Market consensus indicates that max Brazil sugar is needed to prevent medium term supply tightness,” the bank said.
May white sugar rose 0.04% to $541 a tonne.
Raw sugar prices weaken, arabica coffee falls sharply
Coffee
May arabica coffee fell 0.3% to $2.1505 per lb.
Dealers said the market remained on the defensive with funds scaling back long positions recently and the weather in top grower Brazil generally favourable at the moment.
May robusta coffee fell 0.2% to $2,120 a tonne.
Cocoa
May London cocoa fell 0.7% to 1,759 pounds a tonne.
Dealers said the weather in top producer Ivory Coast was generally favourable although the market remained underpinned by the prospect of a substantial global deficit in the current 2021/22 season following a poor crop in number two grower Ghana.
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