LONDON: Raw sugar futures on ICE rose on Friday, heading back towards last week’s multi-year highs on still tight supplies near term, while coffee and cocoa also gained.
July raw sugar rose 1.2% to 25.82 cents per lb at 1216 GMT, having hit an 11-1/2 year peak last week. Dealers said the correction seen since last week’s highs were set seems to have run its course, with lots of buying interest below 25 cents.
They expect the market to remain firm near term given tight supplies in India, Thailand, China and the European Union. Further out though, sugar prices should face some pressure. Output in top producer Brazil’s center-south region is seen growing 13% year-on-year to 38.3 million tonnes in the upcoming season, near record levels, consultancy Datagro said. However, trader Sucden expects port congestion in Brazil will cap sugar exports at a maximum 2.8 million tonnes a month. August white sugar rose 0.6% to $702.40 a tonne.
July arabica coffee rose 2.3% to $1.8720 per lb, having hit a 3-1/2 week low on Thursday. Arabica supply remains tight as top producer Brazil’s harvest is only starting to get underway.
Also, dealers say farmers there are finding beans on the ground following last month’s strong rains. Against that however, there are growing concerns over coffee demand given the macro-economic headwinds. J
uly robusta coffee fell rose 1.7% to $2,452 a tonne, having hit a 12-year high last week. Demand for robusta is solid given historically high arabica prices, while supply in top producer Vietnam remains tight.
There are however some signs export prices in Vietnam have peaked given the recent highs.
July London cocoa rose 0.8% to 2,217 pounds per tonne?, extending a retreat from last week’s 6-1/2 year high. * July New York cocoa rose 1% to $2,934 a tonne.