LONDON: Raw sugar futures on ICE edged up on Friday, heading back towards this week’s 16-month peak as tightening supplies reinforced expectations of a 2026/27 global deficit.
Arabica coffee, meanwhile, recovered from five-week lows.
SUGAR
Raw sugar rose 2.1percent to 18.44 cents per lb at 1310 GMT, moving back towards Wednesday’s 16-month peak of 18.77 cents. It was set to clock about a 5percent weekly gain. Sugar production in top grower Brazil’s key center-south region fell 7.9percent in the first half of August, the agriculture ministry said. “As the US-Iran conflict continues to drag on, elevated energy prices will sustain incentives for Brazilian mills to prioritise ethanol production over sugar,” said BMI, a unit of Fitch Solutions.
It added El Niño poses significant risks for sugar output in key growers India and Thailand. El Niño is set to intensify further into 2027 and could be the strongest ever, raising risks of extreme weather into next year, the World Meteorological Organization said. White sugar rose 1percent to USD531.60 a ton.
COFFEE
Arabica coffee rose 0.3percent to USD2.9635 per lb, recovering from Thursday’s five-week low of USD2.8975. The contract is under pressure overall from a pick-up in top grower Brazil’s exports and the return of rains to its coffee region.
Against that however, broker and consultant Michael Nugent pointed out: “We have genuinely tight arabica certified stocks, still-low inventories at destination (markets) and … El Niño”.
Robusta coffee fell 0.5percent to USD3,356 a metric ton, after hitting a 2-1/2-month low of USD3,329 on Thursday.
COCOA
London cocoa rose 0.9percent to £4,555 per ton, but remained some way off Tuesday one-year high of £4,988. El Nino is a concern for cocoa, but broker ADMIS said these concerns have lessened somewhat. “The previous El Nino brought cool, wet weather during the late summer that cause(d) disease problems. So far this year at least, (West Africa) has avoided the pattern,” it said. New York cocoa rose 1.3percent to USD6,257 a ton.