Sugar, coffee and cocoa futures on London were little changed on Wednesday, after falling earlier in the week as investor appetite for riskier assets diminished on the deepening crises over the eurozone and US debt.
"Sugar prices could remain high, even until early next year, because of the global low ending stocks to use ratio and lower than initially expected output figures for top producer and exporter Brazil in 2011-12," Lysu Paez Cortez, analyst at Natixis, said.
A Reuters poll published earlier this week forecast the world sugar market would switch into surplus in the magnitude of around 7.3 million tonnes in 2011/12.
Production in India, one of the world's largest cane growers and the world's top sugar consumer, is expected to rise to between 25 million and 26 million tonnes, Paez Cortez said.
This is up from around 19 million tonnes in 2009/10. "The market can't rely on India's output to meet global demand as a lot will be used to replenish stocks locally which were drawn down in recent years when production has been lower," Paez Cortez added.
Some dealers were more sceptical of whether the current price levels were sustainable. "A few funds are starting to consider shorting raw sugar if October falls below 28.50 cents," a London-based broker said. October white sugar on Liffe rose $6.0 or 0.8 percent to $756.30 per tonne. Liffe September cocoa was up 4 pounds at 1,998 pounds a tonne. September robusta coffee traded $28 lower, or 1.3 percent, to $2,129 a tonne, as dealers said fund liquidation weighed on prices.
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