Sugar hovers above three-week low

Raw sugar futures on Thursday hovered near a three-week low hit the previous session, while the rest of the softs complex was mired in range-bound business. Ample sugar supplies hampered its upside potential while cocoa benefited from tightening supplies in top grower Ivory Coast.
"We're marking time a little bit (waiting for) the unemployment number," Country Hedging Inc senior analyst Sterling Smith said, referring to the report on January US employment and payroll growth due on Friday. March raw sugar futures on ICE slipped 0.11 cent to close at 23.48 cents per lb. On Wednesday, the contract hit a three-week low of 23.43 cents.
London's March white sugar futures rose 10 cents to finish at $629.80 per tonne. "Everyone is quite convinced that the days of deficit are behind us," said Gary Mead, editor of worldcrops.com. Barclays Capital forecast sugar prices would average 22.4 cents in the first half of 2012. "Despite lower Brazilian production, the move to a larger global market surplus of 5.4 million tonnes in 2011-12, along with an increase of India's exportable surplus and strong production prospects in key Northern Hemisphere producers, will limit upside on prices," Barclays Capital said in a market note.
Sugar production in Brazil's center-south region slowed to a trickle during the first half of January, data from cane industry association Unica showed on Wednesday, as a disappointing harvest drew to a close. Cocoa futures edged higher with production in Ivory Coast set to fall from last year's bumper levels due to a lack of rain, insufficient crop spraying and ageing trees.
Cocoa farmgate prices ticked up in Ivory Coast's main growing regions last week as the price of beans at ports rose and farmers said they were starting to see a shortage of beans up-country. New York's March cocoa futures ended unchanged at $2,225 a tonne, and London's Liffe May cocoa futures gained 5 pounds to finish at 1,465 pounds a tonne.
New York's March arabica contract rose 1.50 cents to close at $2.156 per lb. May robusta coffee on Liffe fell $22 to close at $1,826 a tonne. Dealers said an expected large Brazilian crop this year was keeping the market on the defensive. Vietnam exported an estimated 130,000 tonnes, or 2.17 million bags, of coffee in January, a drop of 39.5 percent from the same month last year, the government said on Thursday.