March 13, 2020 / 1:23 PM / 19 days ago

SOFTS-Raw sugar rises on tight supplies, crude oil gains

LONDON, March 13 (Reuters) - Raw sugar futures on ICE rose on Friday boosted by sharp gains in crude oil and generally supportive fundamentals with the global market widely seen in deficit for the 2019/20 season.

SUGAR

* May raw sugar was up 0.31 cents, or 2.7%, at 11.93 cents per lb by 1249 GMT, rebounding from a 5-1/2 month low of 11.53 cents set on Thursday.

* Dealers said the strength of the premium of white over raw sugar indicated demand may be holding up well. Whites can react more quickly to demand trends as the sugar is ready to be consumed while raws have to be refined.

* Nearby premiums on both raw sugar SB-1=R and white sugar LSU-1=R also provide evidence the physical market is reasonably tight.

* “We would expect a test of resistance at 12 cents,” Thomas Kujawa, co-head of Softs at Sucden Financial said, noting the strength of crude oil prices on Friday. Sugar prices tend to be correlated to oil because sugar cane is used to make biofuel ethanol.

* Dealers said, however, there remained concern that lower gasoline prices could curb demand for ethanol in Brazil, prompting mills to switch to using more cane to produce sugar.

* May white sugar rose $5.10, or 1.4%, to $359.20 a tonne.

* The Indonesian government has issued additional import permits for 550,000 tonnes of raw sugar for household consumption, Musdhalifah Machmud, a senior official at the Coordinating Ministry for Economic Affairs said on Friday.

COFFEE

* May arabica coffee rose 2.45 cents, or 2.25%, to $1.1130 per lb.

* The market was underpinned by tightening supplies with exchange stocks continuing to decline and premiums for washed arabica coffee in the physical market rising.

* May robusta coffee was up $18, or 1.4%, at $1,267 a tonne.

COCOA

* May New York cocoa fell $36, or 1.4%, at $2,459 a tonne after setting a 2-1/2 month low of $2,446.

* Dealers said rains in Ivory Coast had improved the outlook for the mid-crop and added to downward pressure on prices.

* “The upturn in rains will continue to improve moisture and will favour main crop flowering and mid-crop growth, although more rains will likely still be needed in northern belt areas,” weather forecaster Maxar said in a daily update.

* May London cocoa was down 18 pounds, or 1.0%, at 1,851 pounds a tonne. (Reporting by Nigel Hunt; editing by Barbara Lewis)

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