LONDON: Raw sugar futures on ICE edged higher on Wednesday, lifted by light technical buying, but enduring worries about a looming global supply glut kept prices near a 3-1/2 month low touched a day earlier.
SUGAR
March raw sugar was up 0.07 cent, or 0.5 percent, at 13.66 cents per lb by 1140 GMT, after climbing to 13.74 cents.
Prices tumbled as much as 4.3 percent on Tuesday to a low of 13.57 cents, the weakest for the front month since Sept. 29.
This was partly due to reports that Brazil is considering removing a 20-percent tariff on US ethanol imports, which would likely pressure domestic prices of the biofuel and encourage mills to allocate more cane to sugar.
“Such a policy change would mean more Brazilian raw sugar would come to market in 2018,” said Tobin Gorey of the Commonwealth Bank of Australia. “We find it difficult to think of anything that would be worse news for the sugar market.”
Prices were consolidating on Wednesday, dealers said, as the prior session’s sharp drop had left the market in technically oversold territory and encouraged light chart-based buying.
However, they noted traded volume remained thin, signalling the market was hesitant to mount a correction amid enduring worries about ample global supplies, coupled with recent good weather in top grower Brazil.
Dealers also said upside was capped by the threat of producer selling as many remain under-hedged and are likely to aim to sell into short-covering rallies.
March white sugar was up $1.20, or 0.3 percent, at $364.60 a tonne.
COCOA
March London cocoa fell 8 pounds, or 0.6 percent, to 1,383 pounds a tonne.
March New York cocoa was down $3 or 0.2 percent, at$1,929 a tonne.
Market focus was on upcoming grind data from North America and Asia, due out on Thursday. Dealers are anticipating a 1-3 percent rise in North America and at least a 5 percent increase in Asia.
Unrest in Cameroon’s cocoa-growing heartland is fuelling bean smuggling into neighbouring Nigeria, farmers and buyers said on Tuesday.
COFFEE
March arabica coffee was up 0.35 cents, or 0.3 percent, at $1.2080 per lb.
Prices fell to their lowest since Dec. 22 in the prior session, pressured by a wave of speculative selling.
March robusta coffee was up $4 or 0.2 percent at $1,731 a tonne.
Source: Brecorder.com
