LONDON: Raw sugar futures on ICE hit their highest in nearly five months on Tuesday as crude oil rose on worries over potential supply losses from Russia while the Brazilian real remained firm.

Rising energy prices prompt cane mills in top producer Brazil to produce less sugar and more ethanol, a cane-based biofuel. A strong real deters Brazilian exporters from selling by lowering returns in local currency terms.

Sugar

May raw sugar rose 0.4% to 20.4 cents per lb by 1149 GMT, having hit its highest since mid-November at 20.48 cents.

Dealers said that, from a fundamental perspective, there is little reason for prices to improve further given that a small global surplus is expected this season and next.

France’s farm ministry said initial estimates for spring planting envisage the sugar beet area shrinking by 1.5% from last year to 396,000 hectares, which is 11.6% below the five-year average.

May white sugar, which expires on Thursday, rose 0.4% to $561.50 a tonne.

Raw sugar prices weaken, arabica climbs to one-month high

Coffee

July arabica coffee was little changed at $2.3700 per lb, having earlier matched Monday’s one-month high of $2.3750.

Dealers said they expect CTA funds that trade on technical signals to buy nearly 27,200 lots of arabica coffee futures over the next two weeks if prices hold above $2.300 per lb.

Arabica is also gaining support from a stronger real and a resumption in declines in stocks held in ICE warehouses .

July robusta coffee rose 0.3% to $2,123 a tonne.

Cocoa

July London cocoa was up 0.8% at 1,834 pounds a tonne, having hit its highest in almost two months on Monday.

Europe’s first-quarter cocoa grind, a measure of demand, is due to be published on Thursday while data covering North America is scheduled to be released on April 21.

Dealers expect the data to show continued growth in cocoa demand as economies recover from the impact of the COVID-19 pandemic. They added that cocoa is also gaining ground from dry weather in top producer Ivory Coast and Ghana.

July New York cocoa rose 0.7% to $2,683 a tonne.