Raw sugar hits 18-month peak while coffee also gains

LONDON, Oct 2 (Reuters) - Raw sugar futures on ICE hit an 18-month peak above 19 cents on Friday as the market continues to price in a deficit next season. Coffee and cocoa prices also gained.

SUGAR

* Raw sugar ​rose 2.2% to 19.36 cents per lb by 1001 GMT after peaking at an 18-month high of 19.37 cents.

* The contract was heading for gains of 10% this week as traders focus on the deteriorating production outlook and discount current ample supplies.

* Brazilian production dropped 41.6% in the first half of September as rains continue to disrupt fieldwork.

* "The outlook for the 2026/27 season has deteriorated significantly. In addition to higher oil prices, concerns about the upcoming harvest due to the El Nino weather phenomenon have become a key driver," said Commerzbank.

* The bank pointed out El Nino is expected to affect the crops of all three top growers — Brazil, India and Thailand. The coming EU crop is also likely to take a sharp hit from this summer's drought, it added.

* "Should these adverse weather conditions persist, further price increases are likely," Commerzbank added.

* White sugar gained 2.7% to $521 a metric ton.

COFFEE

* Arabica coffee rose 2.6% to $2.9560 per lb, heading for gains of 6% this week.

* Arabica has been boosted partly by quality concerns over Brazil's 2026 crop owing to excess El Nino-linked rains.

* The market is also oversold after a steep decline from peaks set in late August.

* "Prices should continue to fall. We continue to expect further volumes of coffee to reach the exchange in November and

December," said Rabobank.

* Robusta coffee rose 2.6% to $3,357 a ton.

COCOA

* New York cocoa was up 2% at $5,489 a ton after hitting a two-month low of $5,051 on Thursday.

* Cocoa is under pressure from excess supplies after a large global surplus in the 2025/26 season (October/September), though the coming crop has probably taken a hit from adverse El Nino-linked weather.

* "We remain bearish," said Rabobank, adding that the 2025/26 stocks-to-use ratio is estimated at its second-highest since 2011/12 and the 2025/26 season’s surplus is sufficient to offset a potential 2026/27 deficit.

* London cocoa rose 1.9% to £4,108 a ton.