Sugar rises on port delays; arabicas ease

LONDON: Sugar futures rose near recent multi-week peaks on Wednesday, supported by port congestion, but export prospects and a firmer dollar capped upside potential, while ICE arabicas fell under pressure from Brazil's harvest.

Cocoa futures were little changed as dealers tracked ample flows of beans from West Africa but noted concerns over quality.

ICE raw sugar edged up to just below a two-month peak, and white sugar firmed close to a three-month high, supported by Brazilian and Thai port loading delays and strong physical demand before Ramadan in August.

"If you end up having a big delivery against expiry of the ICE July contract on June 30, with much of the sugar Brazilian, you could end up having an even bigger queue of ships at Brazilian ports," a senior London sugar futures dealer said.

Dealers said upside sugar price potential was capped by expectations of sizeable exports from India and the EU.

"Recent weather in the northern hemisphere may be easing drought stress on beets, so outturn from this area may be higher than previously estimated," said Nick Penney of brokerage Sucden Financial.

ICE July raw sugar futures were up 0.21 cent or 0.8 percent at 25.36 cents a lb at 1400 GMT. Liffe August white sugar was up $2.60 or 0.4 percent to $705.60 per tonne in slim volume of 1,946 lots.

Premiums for Thai sugar slipped on Wednesday as consumers waited to see if rates would fall as cane crushing gained pace in top producer Brazil and millers in India expressed interest in exporting more of the sweetener, dealers said.

Liffe robusta futures rose in choppy options-related dealing, while ICE arabicas dipped under pressure from Brazil's harvest as dealers' fears over frost appeared to recede.

"If there is no more talk of frost, people could decide to sell," one veteran coffee futures dealer said.

ICE September arabica coffee was down 1.7 cent or 0.6 percent at $2.7060 per lb at 1401 GMT.

Liffe September robustas were up $59 or 2.5 percent at $2,450 a tonne in moderate volume of 9,448 lots.

COCOA

ICE cocoa was little changed, weighed by the stronger dollar, with September down $4 or 0.1 percent to $2,990 a tonne at 1402 GMT, weighed by steady West African supplies and expectations for a big global surplus.

Liffe September cocoa was up 6 pounds or 0.3 percent to 1,852 pounds per tonne in slim volume of 9,758 lots at 1403 GMT.

Dealers voiced concerns over quality of beans but said the issue did not appear to be having a market impact yet.

"Concerns over quality could detract from the large West African supplies, but they are not really underpinning the market," one senior London cocoa dealer said.

Cocoa output from top grower Ivory Coast is running 14 percent higher than last year, but recent heavy rains have caused quality to slip, exporters said on Tuesday.

Abundant rains in Ivory Coast's cocoa-growing regions last week raised concerns over bean quality from the top grower country during the remainder of the April-September midcrop, farmers and analysts said.

Copyright Reuters, 2011