Raw sugar hits 2-1/2-month high, white sugar signals supply tightness
- White sugar prices hit three month highs, with the front month trading more than $20 per tonne higher than the second month, an inverted market structure that signals tight supply.
LONDON: Raw sugar futures on ICE hit a new 2-1/2-month peak on Friday, heading for gains of around 10pc this week as improved macro-economic signals and tightness in white sugar supply continued to draw funds in on the buy side.
White sugar prices hit three month highs, with the front month trading more than $20 per tonne higher than the second month, an inverted market structure that signals tight supply, strong demand, or both.
SUGAR
July raw sugar rose 0.18 cents, or 1.5pc, to 11.90 cents per lb by 1431 GMT, having hit a peak of 12.03 cents.
Oil prices rallied, deterring Brazilian cane mills from ramping up sugar output at the expense of cane-based ethanol fuel, while world stocks held near three-month highs on Europe's stimulus boost.
Dealers cited fund buying amid improved macro and technical signals, but said fundamentals likely don't justify prices much above 12 cents as Brazil remains on course to produce maximum sugar, while India's output is set to recover.
Broker INTL FCStone sees the global market moving into surplus in 2020/21 and has cut its estimate for the size of the deficit in 2019/20.
August white sugar ??rose $9.70, or 2.5pc, to $394.50 a tonne.
Dealers said supplies are tight due to a decline in Thai output and shipping delays out of Brazil amid coronavirus lockdowns.
COFFEE
July arabica coffee rose 1.4 cents, or 1.4pc, to 99.45 cents per lb??.
The Brazilian real rose, deterring producer selling by lowering the value of dollar-priced coffee in local currency terms.
Brazil's harvest is a little behind the average for this time of the year, but not by much, leaving arabica under pressure overall with the market on course to record a surplus this season.
September robusta coffee rose $31, or 2.5pc, to $1,241 a tonne.
COCOA
September New York cocoa ?rose $14, or 0.6pc, to $2,391 a tonne, amid weakness in the dollar.
July London cocoa fell 23 pounds, or 1.2pc, to 1,872 pounds per tonne,? amid strength in sterling.
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