LONDON: Raw sugar futures on ICE edged higher on Friday, with a diminishing production outlook in China raising the prospect of higher than previously expected imports.
March raw sugar rose 0.3% to 18.14 cents per lb by 1250 GMT. The front month has slowly regained some ground after falling to a 5-1/2-month low of 17.60 cents on Monday.
Dealers noted the upside appeared limited, however, with improving production outlooks for Thailand and India likely to temper any bullish sentiment related to China.
Analyst Green Pool on Friday cut its forecast for China’s sugar production in 2021/22 to less than 10 million tonnes and added that an elevated risk of frost because of the La Nina weather event made for further downside potential.
Higher oil prices also provided support to sugar prices on Friday, increasing the likelihood that mills could use more cane to produce biofuel ethanol rather than sugar.
March white sugar edged up by 0.02% to $497.40 a tonne.
Raw sugar rises as oil gains; arabica hits 1-month top
March New York cocoa was up 0.8% at $2,629 a tonne.
The market has derived support from signs that demand is continuing to pick up after dipping in the early stages of the COVID-19 pandemic.
Europe, Asia and US fourth-quarter cocoa grind data, a measure of demand, will be released next week.
March London cocoa rose 0.6% to 1,743 pounds a tonne.
March robusta coffee fell 0.1% to $2,235 a tonne.
Dealers said that a pick-up in shipments from top robusta producer Vietnam had helped to ease concerns about short-term supply tightness while exchange stocks have begun to creep up.
Valid ICE robusta stocks stood at 97,290 tonnes at Jan. 12, up marginally from 97,120 tonnes a week earlier.
March arabica coffee was down 0.04% to $2.3690 per lb.