LONDON: Cocoa futures rose to near three-month highs on Tuesday, boosted by fund short covering against the backdrop of growing concerns about the outlook for crops in West Africa due to a shortage of fertilisers and an El Nino weather event.
Gains were particularly steep in London, where the market was adjusting to a sharp rise in the New York market on Monday when the UK was shut for a public holiday.
COCOA: London cocoa surged 13.8 percent to 3,053 pounds a metric ton by 1256 GMT after hitting a near three-month high of 3,060 pounds.
Dealers noted speculators had been holding a net short position in both London and New York, but a combination of crop concerns and sentiment that demand may start to recover later this year has prompted some to cover their positions.
New York cocoa rose 4.3 percent to USD4,050 a ton after hitting a near three-month high of USD4,055.
SUGAR: Raw sugar was up 0.2 percent at 15.31 cents per lb after setting a one-month high of 15.43 cents.
Dealers said the market continued to derive support from elevated energy prices.
Higher energy prices can lead to more use of cane to produce biofuel ethanol and, therefore, reduce sugar production.
White sugar gained 1.4 percent to USD452.60 a ton.
COFFEE: Arabica coffee rose 2.9 percent to USD2.9365 per lb.
Uganda’s coffee exports in March rose 2.9 percent from a year earlier on the back of a good crop, the ministry of agriculture, animal industry and fisheries said in a report.
Robusta coffee rose 1.5 percent to USD3,414 a ton.
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