LONDON: Raw sugar futures on ICE rose sharply on Wednesday, boosted by growing concern about short-term supply tightness, while cocoa and coffee prices also advanced.
A further strengthening in the currency of major sugar and coffee producer Brazil was also supportive for those commodities. Brazil’s real had its best day since late August 2020 on Tuesday.
A stronger real reduces dollar-denominated prices in local currency terms in Brazil and can deter producer selling.
March raw sugar was up 0.43 cents, or 2.8%, at 15.89 cents per lb by 1501 GMT, climbing towards last week’s 3-1/2 year high of 16.33 cents.
Dealers said poor crops in Thailand and the European Union had helped to tighten supplies, with the front month’s premium to May widening to about 0.93 cents, up from about 0.84 cents at Tuesday’s close.
March white sugar was up $10.90, or 2.5%, at $446.90 a tonne.
March New York cocoa was up $18, or 0.7%, at $2,516 a tonne.
Dealers said the market was performing comparatively well after a sharp fall in prices early this month, but fundamentals remain bearish with demand weak and supplies more than ample.
A pandemic-induced slowdown in global chocolate demand has led to a pile-up of about 100,000 tonnes of cocoa beans in Ivory Coast’s interior, five exporters told Reuters, as farmers struggle to get by with lower than promised prices.
They noted fourth quarter grind data would be closely watched for further indications on demand trends.
March London cocoa rose 15 pounds, or 0.9%, to 1,709 pounds a tonne.
March arabica coffee rose 1.6 cents, or 1.3%, to $1.23 per lb.
March robusta coffee was up $18, or 1.4%, at $1,320 a tonne.
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