LONDON: Cocoa prices were higher on Tuesday with a rise in grindings expected to diminish the size of any global surplus this season while sugar and coffee prices also edged up.
COCOA
March New York cocoa was up $11, or 0.5 percent, at $2,100 a tonne at 1235 GMT with the market buoyed partly by further evidence that grindings are increasing.
Ivory Coast cocoa grinders had processed 45,000 tonnes of beans by the end of October, the first month of the new season, up 15 percent on the same month of last year, data from the exporters' association GEPEX showed on Tuesday.
Cocoa grindings have also been rising in Europe, Asia and to a lesser extent in North America.
Rabobank said in a report on Tuesday that it forecast global grindings to rise by 2.3 percent in 2017/18 after an increase of more than 4 percent in 2016/17.
"This is rather optimistic, but processor margins remain very high, mainly due to the strength of the butter ratio," the bank said in a report on the outlook for 2018.
Production in Ivory Coast is also expected to be significantly below last season's record, leading to a more balanced global market in 2017/18 following a large surplus in the prior season.
Rabobank said it forecast there would be a global surplus of 130,000 tonnes in 2017/18, down from 300,000 tonnes in the previous season, adding its very preliminary forecast for 2018/19 was a surplus of 60,000 tonnes.
"These surpluses look smaller than they did two months ago but large stocks should prevent any spikes in prices," it said.
March London cocoa rose by 4 pounds, or 0.25 percent, to 1,578 pounds a tonne.
SUGAR
March raw sugar was up 0.07 cent or 0.5 percent at 15.05 cents per lb.
Dealers said the market was consolidating after a rally driven by fund short covering appeared to run out of steam.
March white sugar rose by $1.90, or 0.5 percent, to $390.70 a tonne.
COFFEE
March arabica coffee rose by 0.5 cents, or 0.4 percent, to $1.2625 per lb.
Dealers said the potential for a record crop in Brazil next year could help to keep a lid on prices.
Rabobank on Tuesday forecast there would be global surplus of three million bags in 2018/19, the vast majority in arabicas, compared with a deficit of 4.7 million bags in 2017/18.
January robusta coffee was up $3, or 0.2 percent, at $1,813 a tonne.
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