LONDON: Raw sugar and arabica coffee futures on ICE hit fresh one-month peaks on Tuesday as the Brazilian real hovered near two year highs, deterring exporters from selling dollar-priced goods by lowering their returns in local currency terms.
Sugar also gained support as oil extended its rally on the prospect of further Western sanctions against Russia.
Sugar
May raw sugar rose 0.9% to 19.78 cents per lb at 1057 GMT, after hitting a four-week high of 19.81 cents.
Dealers said high crude prices and a strengthening real continue to make ethanol production in Brazil more competitive than sugar, suggesting a large percentage of cane will be used to make ethanol when the 2022/23 crush gets underway.
They also noted limited selling below 20 cents, suggesting further upside.
Still, supplies from major producers India and Thailand are improving day by day and expected to remain high next season, they said, adding that even Brazilian output should improve in 2022/23.
Thailand is expected to produce 10 million tonnes of sugar in the 2021/22 production year, up 33% on the year, a body of Thai sugar millers said.
May white sugar rose 0.7% to $543.90 a tonne.
Raw sugar prices edge up while coffee and cocoa weaken
Coffee
May arabica coffee edged up 0.1% to $2.3085 per lb, having hit a four-week high of $2.3200, with the strong real deterring selling.
Dealers noted, however, that current exports from Brazil seem to be quite healthy as logistics bottlenecks ease, while certified arabica stocks on ICE have stabilized for now at around 1.1 million bags.
July robusta coffee rose 0.5% to $2,132 a tonne.
Cocoa
July London cocoa rose 0.4% to 1,772 pounds per tonne.
Rabobank said cocoa has been gaining some ground amid heightened concerns about the 2022 summer crop due to limited rainfall across West Africa.
Still, dealers noted the upside is limited at these levels as the market lacks momentum to head decisively higher.
July New York cocoa edged up 0.1% to $2,615 a tonne.
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