Raw sugar hits 18-month peak; coffee also gains

LONDON, Oct 2 (Reuters) - Raw sugar futures on ICE hit an 18-month peak on Friday to nearly 20 cents per pound, as concerns over global production pushed the market to price in a deficit next season, while coffee and cocoa prices also rallied.

SUGAR

* Raw sugar ​​​settled up 0.99 cent, or 5.2%, at 19.93 cents per lb after peaking to an 18-month high of 19.96 cents.

* The spot contract gained 7.7% this week as traders focused on deteriorating production outlook and discounted ample current supplies.

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

* "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 4.8% to $531.50 a metric ton.

COFFEE

* Arabica coffee settled up 0.5 cent, or 0.2%, at $2.8875 per lb. It gained 3.6% in the week.

* Arabica has been boosted near term by quality concerns owing to excess El Nino-linked rains in Brazil.

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

* Looking ahead however, Rabobank said: "Our main view remains unchanged: prices should continue to fall. We continue to expect coffee to reach the exchange in November and December," said Rabobank.

* Robusta coffee rose 0.6% to $3,469 a ton.

COCOA

* New York cocoa settled up $289, or 5.4%, at $5,670 a ton after hitting a two-month low of $5,051 on Thursday.

* Top cocoa grower Ivory Coast's main crop is seen falling around 17% this season due to an El Nino-linked drought and reduced fertiliser and pesticide use, according to a Reuters survey of farmers, exporters, cooperatives and buyers.

* "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 5.1 to £4,239 pounds per ton.