NEW YORK/LONDON: Raw sugar futures on ICE closed lower on Monday, driven down by liquidation of funds’ long positions, while New York cocoa climbed to a 10-month high as heavy rains in top producer Ivory Coast heightened concerns about black pod disease.
March raw sugar settled down 0.37 cent, or 1.8pc, at 19.69 cents per lb.
The market was pressured by signs that funds may be scaling back long positions, with risk appetite diminished by ongoing woes in China’s property sector.
“The longer the market remains directionless, the greater the risk of a fund sell-off. But we think that the past two weeks have seen a momentous change – the apparent return of white sugar demand and the substantial raw sugar demand in September,” broker Marex said in an note.
Dealers also noted the weakening of the Brazilian currency, which usually attracts sales from mills, and weather forecast for more rains in the main sugar belt in the South American country.
Raw sugar recovers after hitting near two-month low
Pakistan’s Trading Corporation of Pakistan (TCP) has issued a new international tender to purchase 50,000 tonnes of white sugar, European traders said on Monday.
December white sugar fell $8.30, or 1.6pc, at $502.60 a tonne.
December New York cocoa closed $42 up, or 1.5pc, to $2,752 a tonne, after hitting a 10-month high of $2,792.
The market has been supported partly by heavy rainfall in top producer Ivory Coast, which increased the threat posed by fungal disease.
Another week of heavy rains has triggered an outbreak of fungal black pod disease in some of Ivory Coast’s cocoa-growing regions, farmers said on Monday.
December London cocoa rose? 14 pounds, or 0.7pc, to 1,897 pounds per tonne??.
December arabica coffee settled down 3.7 cents, or 1.8pc, at $2.0035 per lb after hitting a two-month high of $2.0555 on Friday.
Dealers said the market could consolidate in the short term after its recent run-up, but the overall mood remained bullish, with disruptions to supply in the physical market increasing the appetite for exchange stocks.
Ample rains are forecast to reach Brazil’s South Minas region in coming days, which could improve soil moisture and boost flowering for next year’s crop.
November robusta coffee lost $20, or 0.9pc, to $2,148 a tonne.