Home »Agriculture and Allied » World » Raw sugar hits over two-week high, cocoa prices jump
Raw sugar futures on ICE rallied on Monday, hitting their highest in nearly two weeks as funds rushed to cover their record net short positions and oil prices soared after an attack on Saudi Arabian oil facilities.

Cocoa prices hit 1-1/2 month highs.

October raw sugar was up 0.4 cents, or 3.6%, at 11.28 cents per lb by 1510 GMT, having earlier hit its highest in nearly two weeks at 11.29 cents. The contract set a near one-year low of 10.68 cents last Thursday.

Oil prices surged nearly 20% at one point on Monday after a weekend attack on Saudi Arabian oil facilities shuttered about 5% of the world's supply.

Rising energy prices can boost sugar by prompting Brazilian cane mills to produce more ethanol at the expense of the sweetener. Cane is a feedstock for both products.

"There's (a fear) the oil market is going to blow up. That's dragged up all commodities," one dealer said. "I can't see (sugar) slipping as I'm not sure how much shorter the funds can go.

"If (the funds) start getting calls on oil, they'll have to call in profits from elsewhere."

In the week to Sept. 10, speculators extended their net short position in ICE raw sugar futures for a fifth week in a row to the largest on record, data showed.

October white sugar was up $6.50, or 2.1%, at $323.40 a tonne.

A total of 147,100 tonnes of white sugar from Thailand, Brazil and Mexico was tendered against the October contract on ICE Futures Europe, exchange data showed.

December New York cocoa was up $50, or 2.1%, at $2,386 a tonne, having hit $2,390, its highest level in a month and a half.

Ivory Coast and Ghana have agreed initial deals to sell cocoa with a living-income premium of $400 a tonne added to the price, industry sources and a government source told Reuters.

Cocoa has regained some ground since hitting a low in August of $2,165 on an improved outlook for West Africa main crops in the 2019/20 season.

Cocoa arrivals at ports in top grower Ivory Coast reached 2.16 million tonnes from Oct. 1 last year to Sept. 15, exporters estimated on Monday, up about 11%.

December London cocoa rose 39 pounds, or 2.2%, to 1,829 pounds a tonne, having hit a 1-1/2 month high of 1,832 pounds.

December arabica rose 1.9 cents, or 1.8%, to $1.046 per lb.

In the week to Sept. 10 speculators trimmed their net short position in ICE New York arabica coffee by 1,707 contracts to 50,302.

November robusta coffee rose $17, or 1.3%, to $1,336 a tonne.

Copyright Reuters, 2019


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