London: Sugar prices moved higher on Tuesday, climbing back toward the one-month high touched a day earlier. However, gains were limited as traders expect the Iran conflict may not last long enough to seriously disrupt global sugar supplies, Business Recorder reported.
At 1341 GMT, raw sugar futures on ICE were up 1.4 percent at 14.10 cents per lb. On Monday, prices had closed just 0.2 percent higher after rising as much as 3 percent during the session to reach their strongest level since late January.
White sugar futures also advanced, rising 1.1 percent to $418 per metric ton after settling 1.4 percent higher in the previous session.
The conflict involving Israel, the United States and Iran has unsettled global energy markets and pushed oil prices upward. Higher energy prices can influence sugar production in Brazil, the worldтАЩs largest producer. Mills there have the flexibility to shift between producing sugar and ethanol, a fuel made from sugarcane, depending on which offers better returns.
Market analyst Michael McDougall said investors are largely betting that the conflict will be short-lived. He noted that oil prices could climb above $100 per barrel if supply disruptions continue for another week or two, but so far traders appear cautious.
Speculators who are betting on falling sugar prices remain active in the market. They continue to hold short positions, reflecting expectations of ample global supplies and a likely surplus in the current season.
In other soft commodities, London cocoa rose 0.6 percent to 2,130 pounds per metric ton, extending its rebound after last weekтАЩs sharp losses. New York cocoa slipped 1 percent to $2,991 per metric ton. Arabica coffee edged up 0.2 percent to $2.8510 per pound, while robusta coffee declined 0.6 percent to $3,750 per ton.
