Raw sugar soars as stimulus measures boost financial markets

• Arabica coffee rose for a third consecutive day, helped by gains in wider financial markets and worries about potential supply chain disruptions because of the coronavirus.
• May raw sugar was up 0.4 cents, or 4.2pc, at 11.03 cents per lb by 1455 GMT, having hit its lowest since September 2018, on Thursday.

Arabica coffee rose for a third consecutive day, helped by gains in wider financial markets and worries about potential supply chain disruptions because of the coronavirus.

SUGAR

May raw sugar was up 0.4 cents, or 4.2pc, at 11.03 cents per lb by 1455 GMT, having hit its lowest since September 2018, on Thursday.

Stock markets recouped some of their recent huge losses amid the stimulus measures, though oil prices gave up their gains after Moscow rejected an intervention by U.S. President Donald Trump in Russia's price war with Saudi Arabia.

Rising energy prices tend to prompt cane mills in Brazil to produce more of the biofuel ethanol at the expense of sugar. Cane is a feedstock for both products.

A dealer said that sugar would continue to rise in the short term, given that it is massively oversold, though a sustained rally is unlikely given the macroeconomic uncertainty.

French sugar and ethanol group Cristal Union is running at low capacity due to a slump in ethanol demand, despite a rise in table sugar output and a surge in production of pharmaceutical alcohol to make sanitary gel.

May white sugar rose $7.40, or 2.3pc, to $345.50 a tonne, having hit its lowest since last November on Thursday.

COFFEE

May arabica coffee rose 4.5 cents, or 3.9pc, to $1.1795 per lb, having gained 4pc on Thursday.

Container shortages at ports in top producer Brazil and beyond are boosting arabica, as is general supply tightness and strong retail coffee demand as consumers stock up amid the coronavirus outbreak.

ICE certified stocks <KC-TOT-TOT> fell further, totalling 2.08 million bags at the last count, versus 2.18 million at the end of January.

Soaring arabica premiums in physical markets are deterring traders from delivering coffee to the exchange, where it commands little, if any, mark-up.

May robusta coffee rose $25, or 2.1pc, to $1,241 a tonne.

COCOA

May New York cocoa ??fell $16, or 0.7pc, to $2,213 a tonne, having hit a six-month low on Thursday.

May cocoa could stabilise around support at $2,222 a tonne and bounce towards $2,305, technical signals indicate.

Dealers are concerned that chocolate consumption could suffer because of the coronavirus, while cocoa grinders could use up their plentiful stockpiles and place reduced orders for beans.

May London cocoa fell 19 pounds, or 1.1pc, to 1,775 pounds a tonne.