Raw sugar hits 1-1/2 month high, arabica touches 3-1/2 week peak

LONDON: Raw sugar futures on ICE hit 1-1/2 month highs on Wednesday on fears over further frost damage to the crop in top producer Brazil, while arabica coffee hit a 3-1/2 weak peak.

SUGAR

October raw sugar rose 1.2% to 18.11 cents per lb by 1114 GMT, having hit its highest since mid May at 18.16 cents.

Dealers said sugar is on balance set to move higher as concerns grow over the frost in Brazil. The crop was already being revised lower due to this seasons dry weather, they noted.

They conceded that demand is weak and Indian export sales may well plug any supply gaps, but said the focus was on producers who remain reticent to sell into higher prices.

Frosts were reported on Wednesday in sugarcane growing regions in Sao Paulo, a state that accounts for over 60% of Brazil's sugar output, as well as in southern Mato Grosso do Sul and northern Parana.

More frosts are forecast for Thursday.

PepsiCo plans to reduce sugar content in sodas and iced teas by a fourth in the European Union and launch more nutritious snacks by 2025.

August white sugar rose 2.4% to $458.40 a tonne.

COFFEE

September arabica coffee rose 1.4% to $1.6195 per lb, having hit its highest since early June at $1.6465 amid bullish sentiment in sugar and other commodities.

Brokers and analysts think most of Brazil's coffee will be spared from frost damage since the cold air mass will be weaker when it reaches the main producing areas in Minas Gerais state.

Brazil's 2021/22 coffee harvest is now seen at 53.7 million 60kg bags, up 4.5% compared with a previous estimate in January, broker StoneX said.

September robusta coffee rose 0.7% to $1,715 a tonne.

COCOA

September New York cocoa edged up 0.1% to $2,391 a tonne.

Dealers said short sellers still hold the reins in cocoa, with forecasts for a good current crop in world No. 2 producer Ghana at around 1.1 million tonnes.

September London cocoa edged up 0.1% to 1,635 pounds per tonne.