Raw sugar prices climb as crude oil rebounds

• May raw sugar was up 0.26 cents, or 2.4pc, at 11.30 cents per lb by 1235 GMT.
• Dealers said the market was supported by potential disruptions to shipments out of Brazil linked to the coronavirus pandemic and declining stocks.

LONDON: Raw sugar futures on ICE rose sharply on Tuesday, buoyed by a rebound in crude oil prices, while arabica coffee also advanced on tightening supplies.

SUGAR

May raw sugar was up 0.26 cents, or 2.4pc, at 11.30 cents per lb by 1235 GMT. The front month fell to a 1-1/2 year low of 10.44 cents last week.

"The market is likely to remain highly correlated with oil prices in the near-term. Sugar prices remain above what would be ethanol parity for Brazil's mills," Commonwealth Bank of Australia analyst Tobin Gorey said in a note.

Brazilian mills are expected to make a sharp switch from ethanol to sugar production in the new season kicking off in the world's largest sugarcane producer, as falling gasoline prices and a weak currency reduce the biofuel's appeal, analysts said.

Oil jumped 5pc on Tuesday to above $28 a barrel, supported by steps by the US Federal Reserve to bolster the economy and hopes the United States will soon reach a deal on a $2 trillion coronavirus aid package.

May white sugar rose $5.70, or 1.7pc, to $346.30 a tonne.

COFFEE

May arabica coffee rose 1.60 cents, or 1.3pc, to $1.2285 per lb.

Dealers said the market was supported by potential disruptions to shipments out of Brazil linked to the coronavirus pandemic and declining stocks.

They noted ICE certified stocks were continuing to decline.

May robusta coffee rose $7, or 0.6pc, to $1,251 a tonne.

COCOA

May New York cocoa fell $3, or 0.1pc, to $2,254 a tonne.

Dealers said an improving outlook for the mid-crop in Ivory Coast remained a bearish influence and concerns about weakening demand.

May London cocoa was up 16 pounds, or 0.9pc, at 1,862 pounds a tonne.