LONDON: Raw sugar prices hit their highest in nine months on Friday as funds covered short positions amid tightening supplies and producers scaled back selling.

March raw sugar was up 0.12 cent, or 0.9%, to 12.91 cents per lb at 1450 GMT, having hit its highest since late February at 12.99.

A large amount of producer selling has been done at current price levels, Sucden Financial said in a note, adding market sentiment was cautiously bullish.

Producer selling of excess stocks had been keeping sugar range bound over the past few weeks, offsetting fund short covering amid forecasts for a widening market deficit.

The weak Brazilian real has also weighed, but Sucden said it expected the currency to recover as Brazil’s central bank has pledged to defend it.

A stronger real lowers the value of dollar-priced sugar in local currency terms, discouraging producer selling.

French sugar group Tereos SA expects to report improved results in the second half of 2019/20, driven by higher prices for both sugar and ethanol, Chief Executive Alexis Duval said.

March white sugar was up $1.10, or 0.3%, at $344.30 a tonne.

Ukraine has produced around 1.26 million tonnes of white sugar this year, exceeding expectations.

March arabica coffee futures fell 0.4 cents, or 0.3%, to $1.1805 per lb, edging away from a one-year high set early this week.

Arabica has been supported in recent weeks by drier-than-normal weather conditions and by declines in ICE-certified stocks, which are near their lowest in around a year and a half.

A global deficit is widely forecast in the 2019/20 season.

Looking ahead, Rabobank said it expected Brazil would produce a record 66.7 million 60-kg bags next season. However, the bank believes the price outlook will remain positive as production will likely fall in other countries.

March robusta rose $9, or 0.6%, to $1,406 a tonne, having hit its highest since early July on Tuesday.

Coffee exports from Vietnam, the world’s top robusta producer, likely fell 14.6% in the first 11 months of this year.

March New York cocoa was flat at $2,597 per tonne, as the market’s retreat from a recent 1-1/2 year high petered out.

March cocoa may stabilise around a support at $2,566 per tonne and retest a resistance at $2,683, technical signals indicate.

March London cocoa was flat at 1,900 a tonne.—Reuters