NEW YORK/LONDON: Raw sugar futures on ICE closed 6% up to the highest level in more than four years on Tuesday, with sugar production in the key center-south region of Brazil dented by recent frosts that also threatened to curb production next season.
SUGAR
October raw sugar ??settled up 1.12 cents, or 6.1%, at 19.59 cents per lb, after climbing to a peak of 19.75 cents - the highest since March 2017.
Sugar production in Brazil's center-south region fell 11% in the second half of July to 3 million tonnes as recent frosts hurt crops in the world's largest producer, industry group Unica said in a report on Tuesday.
"It is all Unica," said a US-based broker referring to the crop report's influence on the market. The market was already moving up before the release as market estimates for a large production fall were circulating.
"For this year, the impact is driven by the need to harvest frost-affected cane ahead of other fields, thereby achieving sub-optimal yields, while for next year, the impact is due to fresh cane shoots dying back," the International Sugar Organization said in an update issued on Tuesday.
October white sugar rose $18.00, or 4.0%, at $468.20 a tonne.
COCOA
December New York cocoa ?settled up $56, or 2.3%, to $2,536 a tonne?.
Dealers said the market had derived some support from concerns about cold weather in top grower Ivory Coast, which may slow the start to the main crop in October.
December London cocoa rose 33 pounds, or 1.9%, to 1,752 pounds per tonne.
COFFEE
November robusta coffee settled up $66, or 3.7%, at $1,863 a tonne, the highest this month.
Dealers said robusta prices continue to catch up with the recent rise in arabica, as a likely tightness in the supply of arabica due to Brazil frosts will drive consumers to increase robusta buying for blending. September arabica coffee closed up 2.65 cents, or 1.5%, at $1.82 per lb.
"Coffee prices are likely going to continue to be volatile, as frost impact on the flowering and the response of the farmer on the damaged trees is still to be seen," Rabobank said in a note.
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