LONDON: Raw sugar futures on ICE hit their highest in more than two weeks on Monday as selling in top grower Brazil dried up and oil prices rallied on stalled US-Iran peace talks.
High energy prices are bullish for sugar prices as they tend to prompt cane mills to produce less sugar and more of the biofuel ethanol.
SUGAR
Raw sugar rose 1.4percent to 14.12 cents per lb, having hit its highest since April 9 at 14.15. The contract gained 4.6percent last week. “It would appear origin has finished (panic selling) and is waiting for a higher level,” said broker and consultant Michael McDougall.
Elsewhere, the sweetener is gaining from bets ethanol demand and prices in Brazil are set to rise.
Brazilian state-run oil firm Petrobras will increase the average price of jet fuel sold to distributors by 18percent starting May 1, local newspaper Valor Economico said. Also, Brazil’s government said last week a proposal to increase ethanol blending in gasoline from 30percent to 32percent will be evaluated by the country’s energy council next week. White sugar rose 0.6percent to USD437.70 a metric ton.
COFFEE
Arabica coffee fell 0.5percent to USD2.9350 per lb, after hitting a one-month high of USD3.0625 on Friday. Arabica gained support last week from falling exchange stocks, but the rally has since run out of steam thanks to selling from farmers and exporters in top grower Brazil.
Robusta coffee fell 0.4percent to USD3,468 a ton, having also hit a one-month high on Friday.
COCOA
London cocoa fell 2.8percent to 2,491 pounds a ton, having gained 6percent last week. After sharp falls this year, cocoa is finding a slightly higher floor amid expectations that demand will recover.