LONDON: Raw sugar futures on ICE rebounded from a seven-week low on Friday buoyed by crop concerns linked to El Nino conditions in the coming months, while cocoa prices also climbed.
SUGAR
Raw sugar rose 1.2percent to 13.95 cents per lb at 1407 GMT, having earlier hit a seven-week low of 13.68 cents. The market is on track for a weekly loss of 1.3percent.
Dealers said early weakness was driven by a decline in crude oil prices and ample short-term supplies. They noted, however, that the outlook for global sugar production in the 2026/27 season was deteriorating, with mills in Brazil favouring ethanol over sugar as the cane harvest progresses in the Centre-South region. An El Nino climate phenomenon could also curb production in several countries, including India and Mexico.
Moderate to strong El Nino conditions are likely to prevail during India’s June-September monsoon season, the weather bureau said on Friday, raising concerns about rainfall and crop prospects in the world’s most populous country. White sugar gained 0.7percent to USD449.60 a metric ton.
COCOA
London cocoa rose 1.8percent to £2,916 a ton and was on track for a weekly gain of 1.4percent. A rise in port arrivals in top grower Ivory Coast and a generally favourable outlook for the rest of the mid-crop harvest continue to weigh on prices.
The market, however, is underpinned by concerns that production in West Africa will decline in the 2026/27 season partly due to El Nino weather conditions.
“We maintain that weather-related risks will provide upside support to prices over the coming quarters,” BMI said in a note on Friday. New York cocoa rose 2.9percent to USD3,908 a ton.
COFFEE
Arabica coffee rose 1.3percent to USD2.5350 per lb with the market on course to post a weekly gain of 4.7percent.
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