Raw sugar futures on ICE rose on Monday, boosted by further gains in crude oil as tensions in the Middle East simmered after a US air strike in Baghdad killed the head of Iran’s elite Quds force.
Coffee and cocoa prices, meanwhile, were both on the retreat.
March raw sugar rose 0.21 cents, or 1.6%, to 13.52 cents per lb by 1441 GMT.
Oil prices topped $70 a barrel as rhetoric from the United States, Iran and Iraq fanned tensions in the Middle East, where nearly half of the world’s oil is produced.
Higher energy prices drive up the use of cane to produce the biofuel ethanol rather than sugar.
Dealers said sugar was poised to rise even before the oil price surge, with the market heading for a global deficit of more than 6 million tonnes this season and a fair chance of a deficit next season.
Large sugar stocks built up over years of surplus are still overhanging the market, however.
Sugar had been range-bound for the past couple of weeks after the rally that took prices to a more than one-year peak of 13.67 cents per lb on Dec. 13 temporarily ran out of steam.
March white sugar rose $4.10, or 1.15%, to $361.30 a tonne.
March arabica coffee fell 3.7 cents, or 2.9%, to $1.2255 per lb after hitting a one-month low of $1.2235.
The market was extending its retreat from a more than two-year high of $1.4245 set on Dec. 17.
Top coffee producer Brazil exported 3.16 million 60 kg bags of coffee in December, down from 4.10 million a year ago.
March robusta coffee fell $23, or 1.7% percent, to $1,349 a tonne.
March London cocoa fell 48 pounds, or 2.6%, to 1,781 pounds a tonne, pressured partly by sterling’s rebound against the dollar.
March New York cocoa fell $50, or 2%, to $2,468 a tonne. Dealers noted good supply prospects and said funds looked poised to keep cutting the long positions built up during cocoa’s November rally to 1-1/2 year highs.
Cocoa arrivals at ports in top grower Ivory Coast reached 1,153,000 tonnes between Oct. 1 and Jan. 5, exporters estimated, up 3.6% from a year ago.
Cocoa farmers in Ivory Coast remain cautiously optimistic, given that the seasonal dry Harmattan winds have not affected crops so far.
Ghana’s graded and sealed (G&S) cocoa arrivals stood at 456,000 tonnes at Dec. 19, unchanged from last year, figures from marketing board Cocobod show.
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