LONDON: Raw sugar futures on ICE hit one week highs on Friday as dealers set aside falling oil prices to focus on Europe’s record breaking heatwave and on fears the El Nino pattern might hammer output.
Sugar
Raw sugar rose 1.9% to 13.81 cents per lb at 1156 GMT, having hit a week high of 13.82.
“We are finding support in the market (from) the weather situation in India, Europe, Thailand, Florida and elsewhere,” said broker and consultant Michael McDougall.
He noted the current heat wave in Europe has been recognised as the worst on record, the monsoon rains in India are down 42%, Thailand is hot and dry while the cane in Florida is infested with mealybugs.
Limiting losses in sugar all the same are weaker energy prices, which raise the prospect that more cane will be used to produce sugar rather than the biofuel ethanol.
White sugar rose 2% to $453.50 a metric ton, having hit a one week high of $454.20.
Coffee
Robusta coffee dipped 0.3% to $3,652 a ton, having hit a three month high of $3,692 on Thursday.
“El Niño presents a key upside risk to robusta prices through its potential to bring hotter and drier conditions across Southeast Asia and India,” said Rabobank in a note.
Arabica coffee fell 1% to $2.7370 per lb, having hit a near six-week high of $2.8480 per lb on Wednesday.
Recent El-Nino-linked rains in Brazil have led to some quality issues and slowed harvest progress, though overall, the world’s top arabica grower is still expected to produce a bumper harvest this season.
COCOA
London cocoa slipped 0.3% to £3,919 a ton, having set a five-month high of £4,014 on Thursday.
Rabobank said cocoa is being driven by “the transition toward an active El Niño event, easing geopolitical tensions in the Middle East, and a slow start to the development of West Africa’s 2026/27 main crop”.
Comments