Raw sugar hits two-year high, arabica coffee rebounds

• March raw sugar was up 0.15 cents, or 1pc, at 15.04 cents per lb at 1018 GMT after reaching a two-year peak of 15.10 cents.
• March white sugar was up $3, or 0.7pc, at $419.60 a tonne after touching a 2-1/2 year high of $419.80.
• March New York cocoa fell $8, or 0.3pc, to $2,726 a tonne.

LONDON: Raw sugar futures on ICE rose to a two-year high on Tuesday, boosted by tightening supplies, while arabica coffee rebounded from the previous session's three-month low.

SUGAR

March raw sugar was up 0.15 cents, or 1pc, at 15.04 cents per lb at 1018 GMT after reaching a two-year peak of 15.10 cents.

Dealers said that lower production in India and the European Union had helped to tighten the market, with March trading at a widening premium of about 0.33 cents to May, up from 0.28 cents at Monday's close.

"The March-May time spread continues to trade deeper into backwardation, suggesting a tightening in the prompt physical market," ING said in a market note.

Indian mills produced 14.1 million tonnes of sugar between Oct. 1 and Jan. 31, down nearly 24pc from a year earlier, after some mills were forced to call an early halt to cane crushing because of limited supplies, the Indian Sugar Mills Association said.

March white sugar was up $3, or 0.7pc, at $419.60 a tonne after touching a 2-1/2 year high of $419.80.

A global sugar deficit is expected in the 2020/21 season, though higher production will keep it in check, analyst Green Pool said on Tuesday, issuing its first forecast for the period.

COFFEE

March arabica coffee was up 3.25 cents, or 3.3pc, at $1.0120 per lb, rebounding from the previous session's three-month low of 97.80 cents.

Dealers noted the recent strong rise in exchange stocks had finally come to an end, helping to provide some price support, while the market was also technically oversold after a sharp decline in the past few sessions.

March robusta rose by $25, or 1.9pc, to $1,315 a tonne.

COCOA

March London cocoa was down 19 pounds, or 1pc, at 1,916 pounds a tonne.

No rain fell last week in most of Ivory Coast's cocoa regions, farmers told Reuters, adding to concerns over crop development during a crucial growing period for the world's top producer.

March New York cocoa fell $8, or 0.3pc, to $2,726 a tonne.