SOFTS-Raw sugar climbs to 3-week high as deficit outlook widens

NEW YORK, May 1 (Reuters) - Raw sugar futures on ICE rose to a three-week high on Friday, with elevated energy prices curbing production of the sweetener, widening an expected global deficit in the 2026/27 season.

SUGAR

Raw sugar SBc1 settled up 0.34 cent, or 2.3%, at 14.95 cents per lb, after setting a three-week high of 15.01 earlier in the session.

Analyst Green Pool raised its 2026/27 global sugar deficit forecast to 4.3 million metric tons from 1.66 million previously, as high energy prices encourage Brazilian mills to use cane to make ethanol rather than the sweetener.

"The outlook for ethanol production has firmed up due to a firmer Brazilian real, higher global gasoline prices and increasing odds that Brazil will change fuel taxes and/or increase the ethanol blend in gasoline," the analyst said.

Brazil's President Luiz Inacio Lula da Silva confirmed late on Thursday that the country will increase ethanol blending in gasoline from 30% to 32%. The change is expected to boost demand for the biofuel by 1 billion liters in the year.

Deliveries of sugar on the expiration of the May contract were relatively small, which is usually seen as a bullish signal for the market.

White sugar LSUc1 rose 1.7% to $446.50 a metric ton.

COCOA

London cocoa LCCc2 ​settled up 20 pounds, or 0.7%, to 2,688 pounds per ton, after earlier hitting a 2-1/2-month high of 2,709 pounds.

Cocoa is gaining support from concerns that a shortage of fertilisers and a looming El Nino weather event could curb 2026/27 production.

"Cocoa prices have likely bottomed and could rebound in the remaining part of the year, which might be exacerbated by a stronger El Nino," Citi said in a note.

In demand-side news, U.S. candy maker Hershey beat first-quarter earnings estimates as GLP-1 users drove demand for its healthier snacks, but recorded a 4% fall in confectionery sales volumes.

New York cocoa CCc2 rose 0.8% to $3,596 a ton.

COFFEE

Arabica coffee KCc2 settled up 0.85 cent, or 0.3%, at $2.864 per lb. The market has been stable, gaining only 0.3% for the week.

The prospect of a bumper coffee harvest in top grower Brazil is weighing on prices.

"Arabica could be an outlier commodity, where the net effect from a strong El Nino could be positive for yields (in Brazil)," said Citi.

Robusta coffee LRCc2 was little changed at $3,364 a ton.