LONDON: Raw sugar futures on ICE rose on Tuesday, recovering from Monday’s two-month lows, while arabica coffee hit its lowest in 1-1/2 months.
March raw sugar rose 1.1% to 19.38 cents per lb at 1506 GMT, after touching 18.92 cents on Monday.
Dealers said the recent fund long liquidation has dried up and sugar looks set to consolidate around current levels provided the largely negative macro economic signals do not worsen.
In the background, Brazil’s decision not to reinstate federal taxes on gasoline continues to weigh, as it could encourage more use of cane to produce sugar rather than ethanol.
Dealers are also monitoring political unrest in Brazil after supporters of the country’s former president Jair Bolsonaro stormed the capital over the weekend.
March white sugar rose 1.7% to $544.40 a tonne.
March arabica coffee fell 2.6% to $1.5380 per lb, having hit a low of $1.5355.
Favourable weather in top producer Brazil and rising exchange stocks are weighing on arabica.
Dealers noted, however, the market expects around 17,000 lots of futures will be bought on the Bloomberg commodity index this week.
“We expect this buying to bring coffee futures back to $1.75,” said a dealer.
March robusta coffee fell 0.9% to $1,843 a tonne.
Top robusta producer Vietnam’s 2022 coffee exports rose 13.8% year on year in 2022, data showed.
March New York cocoa fell 1.6% to $2,032 a tonne. The contract hit the highest since mid-February on Monday at $2,699.
Climate42 said there have been extreme temperature swings over the last month in top producer Ivory Coast. As a result, cocoa trees depleted their water reserves at a higher rate and fresh flowering was probably inhibited.
March London cocoa fell 2.9% to 2,612 pounds per tonne.