Raw sugar futures on ICE climbed to a one-month high on Tuesday while arabica coffee also advanced with both markets boosted by a strengthening in Brazil's real currency. July raw sugar rose 0.10 cent, or 0.8%, to 12.29 cents per lb by 1400 GMT after setting a one-month high of 12.33 cents.
Dealers said the stronger Brazil real helped spark the recent run-up and helped create a more bullish outlook on price charts. "Momentum indicators and the recent strong price action (and volumes) are suggesting there is potentially still more to come," said Thomas Kuwaja, co-head of the softs department at Sucden Financial. Brazil exported 1.55 million tonnes of raw sugar in May, down from 1.81 million in the same month last year, government data showed on Monday.
August white sugar rose $3.00, or 0.9%, to $333.80 a tonne. An Ethiopian government company has issued an international tender to buy up to 100,000 tonnes of white cane sugar, European traders said on Tuesday. July arabica coffee was up 1.25 cents, or 1.2%, at $1.05 per lb. The front month peaked at a four-month high of $1.0565 on Monday. Dealers said the market's recent run-up had been fuelled by the stronger Brazil real and adverse weather in the world's top producer with rains during harvest threatening to reduce the quality of the crop.
"Rainfall is expected to stop in Brazil, for now at least. But much of the crop is mature and the amount of semi-washed is likely to come in lower than in recent years despite a growing quality premium," Rabobank said in a market note. Dealers noted the pace of exports from Brazil remained strong, however, ensuring the market had ample supplies.
Brazil exported 3.16 million 60-kg bags of coffee in May, sharply up from 1.41 million in the same month last year, government data showed on Monday. July robusta coffee fell $6, or 0.4%, to $1,474 a tonne after rising to a two-month high of $1,491 on Monday. July London cocoa fell 16 pounds, or 0.9%, to 1,735 pounds a tonne, extending the market's recent retreat following a sharp rise in prices in the second half of May. July New York cocoa was down $27, or 1.15%, at $2,324 a tonne.
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