Raw sugar climbs to six-year high; arabica gains nearly 7%
Updates with market activity, comments and closing prices
NEW YORK/LONDON, Jan 31 (Reuters) - Raw sugar futures on ICE hit a six-year high on Tuesday on continuing worries over tightening supply, highlighted by a worsening production outlook in India.
Arabica coffee, meanwhile, rallied nearly 7% to a three-month peak.
SUGAR
* March raw sugar SBc1 settled up 0.55 cents, or 2.6%, at 21.76 cents per lb after touching its highest since late 2016 at 21.82 cents.
* India, the world's second-largest sugar exporter, is likely to produce 34 million tonnes of the sweetener in 2022/23, down 7% from the previous forecast, a leading trade body said.
* Dealers said sugar prices were being boosted by that production outlook coupled with concerns that top exporter Brazil might also produce less if its energy policy improves ethanol's profitability.
* Brazil's Finance Ministry said it expects federal taxes on fuels to be reinstated in March, which would benefit ethanol.
* Brokers, however,added that technical signals suggest the market is moving close to over-bought territory.
* A global sugar deficit of 1.01 million tonnes is projected for the 2023/24 season, ending a run of three successive surpluses, analyst Green Pool said.
* March white sugar LSUc1 rose $12.00, or 2.1%, at $580.70 a tonne.
COFFEE
* March arabica coffee KCc1 settled up 11.35 cents, or 6.7%, at $1.8175 per lb after touching the highest price since early November at $1.8280.
* Dealers reported a strong short-covering movement by funds - which have been carrying a large short position - when the market broke resistance around $1.75/lb.
* "Shorts got squeezed as market fundamentals look better, with global inventory clearly not as robust as appeared," one U.S. broker said, citing reduced increases in certified stocks and nearly daily withdraws.
* Dealers also cited strong differentials for Brazilian coffee.
* March robusta coffee LRCc1 rose $70, or 3.4%, at $2,107 a tonne.
* Indonesia exported 16,152.89 tonnes of Sumatran robusta coffee beans from Lampung province in December, down 51% from a year earlier.
COCOA
* March New York cocoa CCc1 fell $30, or 1.1%, to $2,581 a tonne.
* Above-average rain in most of top grower Ivory Coast's cocoa regions last week will boost the April to September mid-crop after weeks of dry weather, farmers said.
* March London cocoa LCCc1 fell 13 pounds, or 0.6%, to 2,025 pounds per tonne.
Reporting by Marcelo Teixeira and Maytaal Angel
Editing by David Goodman
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
