(Reuters) – March 3 Raw sugar futures harnessed their upward momentum to reach a two-month high on Thursday while coffee also advanced, boosted by the prospect of lower exports from top producer Brazil as a result of a strengthening in the country’s currency.
Brazil’s real rose to its highest against the U.S. dollar in nearly three months, boosted partly by better-than-expected trade data.
“This makes it less attractive for Brazilian sugar exporters to sell sugar on the world market. At the same time, this could see more sugar cane being turned into ethanol, which is consumed mainly on the domestic market,” Commerzbank said in a note.
“On balance, this means less sugar supply from Brazil.”
May raw sugar settled up 0.17 cent, or 1.2 percent, at 14.84 cents per lb, after climbing to the highest since Jan. 4 at 14.90 cents.
May white sugar settled up $6.20, or 1.5 percent, at $420.90 per tonne.
A stronger Brazilian real has also made sales of arabica coffee on the dollar-denominated global market less attractive to Brazilian producers and helped futures to rebound after they tested support just above contract lows, traders said.
May arabica coffee settled up 2.3 cents, or 2 percent, at $1.1785 per lb after finding support on both Tuesday and Wednesday just above its contract low of $1.1335.
May robusta coffee settled up $3, or 0.2 percent, at $1,394 per tonne.
London cocoa futures extended their retreat from a near-two-month high set this week as expectations of sluggish demand helped to offset the prospect of lower mid-crops in West Africa.
“I’m still a bit worried about global demand,” one dealer said, adding there was little sign of any significant rebound this season after a decline of about 4 percent in world grindings in the 2014-15 season.
Dealers said grindings might rise this season at a slower rate than the 1.9 percent projected by the International Cocoa Organization last week.
“The big growth areas (for cocoa demand) are all struggling,” one dealer said, referring to difficult economic environments in the Far East, Middle East and eastern Europe.
May London cocoa finished down 9 pounds, or 0.4 percent, at 2,181 pounds a tonne, while May New York cocoa settled up $4, or 0.1 percent, at $2,952 per tonne. (Editing by Jane Merriman and James Dalgleish)
