(Bloomberg) -- Raw-sugar futures rose, heading for the longest streak of monthly gains since 2006 as demand increases at a time of diminished supplies.
Key buyers Indonesia and China are ramping up imports of the sweetener, while a drought curbs prospects in top shipper Brazil and Thailand contends with a lower crop outlook. Drier-than-normal conditions over Brazil's Center-South cane-growing areas are expected to result in a decline in the nation's 2021-22 production, and the drop could be accentuated if there's a big shift toward cane use in ethanol production, according to the Hightower Report.
“With demand remaining strong through the Covid shutdowns, sugar prices should remain fairly well supported on near-term pullbacks,” the Chicago-based Hightower Report said.
Raw-sugar futures for March delivery rose as much as 1.4% to 15.50 cents a pound on ICE Futures U.S. in New York, the highest for a most-active contract in six weeks. The commodity traded at 15.48 cents at 11:54 a.m. Sugar is nearing an eighth straight monthly advance in December. For the year, it's up 15%, the most since 2016.
In other markets, arabica coffee rose 2.2% on Thursday, heading for a second straight monthly gain. Prices are down 1.2% for the year. Cotton fell but is still on track for its first annual gain in three years, rising for a ninth straight month in December, the longest streak of increases since 1980.
A Bloomberg gauge tracking spot prices for soft commodities has climbed 14% this quarter, helped by a weaker dollar.
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