Raw sugar futures hit a five-month high Thursday as the U.S.-Israeli conflict with Iran sent oil prices soaring, raising fears of reduced sugar output from Brazil.
Brazilian cane mills may shift production toward ethanol-a cane-based biofuel-as energy costs climb. Raw sugar rose 3.7% to 15.34 cents per pound, peaking at 15.49 cents, its highest since mid-October.
Iran’s retaliatory strikes on regional energy infrastructure mark a major war escalation. Speculators responded by covering short positions and betting on rising prices, according to Alberto Peixoto of AP Commodities. Yet he cautioned that “producer selling is greater than spec buying,” capping upside potential.
White sugar climbed 3.1% to $450.60 per metric ton. Robusta coffee gained 2% to $3,647 a ton, while Arabica rose to $2.9870 per pound. Brazilian farmers are holding back sales amid hopes for higher prices despite expectations of a record crop.
Rabobank forecasts near-term price support due to slow farmer sales, Red Sea shipping disruptions, and rising freight and fertilizer costs.
London cocoa rose 2.5% to £2,464 per ton, even as Ghana struggles to finance farmer purchases despite cutting its official cocoa price. New York cocoa fell 2.2% to $3,333 a ton.