LONDON: Raw sugar futures on ICE were higher on Wednesday, buoyed by gains in crude oil and a weaker dollar, while coffee and cocoa prices also rose.
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 2% to 19.50 cents per lb by 1354 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 fell 0.1% to $540.10 a tonne.
COFFEE
May arabica coffee rose 1.1% to $2.1810 per lb.
Dealers noted certified stocks of arabica coffee had begun to fall again, dipping to 1.11 million bags, as of Monday, down from 1.14 million bags late last week.
The recent strong pace of Brazil exports and generally favourable weather in the world’s top coffee producer would likely limit the upside potential for prices.
May robusta coffee rose 0.5% to $2,135 a tonne.
COCOA
May New York cocoa rose 0.5% to $2,652 a tonne.
Dealers said 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. May London cocoa rose 0.2% to 1,775 pounds a tonne.
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