NEW YORK: Raw sugar futures on ICE steadied near a one-month low on Friday, heading for 7percent losses on the week as investors focused on ample supplies and put aside rising energy prices and the Iran war, for now. Higher energy prices are bullish for sugar because they can prompt cane mills to lower sugar output in favour of ethanol, a cane-based biofuel.
SUGAR
Raw sugar edged up 0.4percent at 13.99 cents per lb at 1011 GMT, not far off Thursday’s one month low of 13.90 cents. “The market remains more sensitive to its own supply and demand balance than to external drivers,” said broker StoneX. “Sugar continues to show weakness, as during the recent (futures market) rally the export premium (for physical sugar) in Santos did not follow. On the contrary, (it) declined,” it added.
China, the world’s second-largest sugar importer, has raised its forecast for 2025/26 sugar output by 800,000 metric tons from the previous month to 12.5 million.
Looking ahead, supplies might tighten as the US Climate Prediction Center has forecast the El Niño weather phenomenon has a 61percent chance of developing between May and June 2026 and is expected to persist through at least the end of 2026. White sugar rose 0.9percent to USD417.50 a ton, having hit its lowest since mid-March on Thursday.
COFFEE
Arabica coffee dipped 0.3percent to USD2.9270 per lb, having hit a one-month low this week. February coffee exports from Uganda, the world’s sixth- largest producer, rose 17.3percent compared with the same period last year, helped by higher production, the ministry of agriculture said.
Coffee is under pressure more broadly from expectations for an ample crop this year from top grower Brazil. Robusta coffee fell 1.2percent to USD3,270 a ton, having hit its lowest since last July at USD3,265.
COCOA
London cocoa rose 1.3percent to 2,398 pounds a metric ton. Dealers said there is little correlation between El Niño and rainfall in top cocoa-growing region West Africa, though the weather phenomenon could lead to high temperatures and dips in production in Ecuador and Indonesia. Overall though, cocoa remains rangebound amid weak demand and a modest supply recovery, both of which are seen as priced in for now. New York cocoa rose 1.8 percent to USD3,218 a ton.