Raw sugar hits 7-1/2-month high, cocoa also climbs

LONDON/NEW YORK: Raw sugar futures on ICE rose to a 7-1/2-month high on Monday, boosted by fund buying against a backdrop of uncertainty about the extent to which India might subsidise exports in the current season, while cocoa prices also climbed.

SUGAR

March raw sugar settled up 0.29 cent, or 2.0%, at 14.72 cents per lb, the highest prices since February 26.

Dealers noted fund buying had helped fuel the recent run-up, with weekly CFTC data showing a further increase in bullish bets.

The market was supported by the lack of an announcement from India on export subsidies for the 2020/21 season.

Analysts Green Pool said in a note that India had exported a record 5.84 million tonnes in 2019/20, with the export subsidy level equating to 6 to 7 cents per lb.

"India's COVID crisis is a major budget issue for government and perhaps the finance ministry is making the case that subsidies are wasteful," Green Pool said.

India needs to export 6 million tonnes of sugar in the 2020/21 marketing year started on Oct. 1 as production is set to jump on a higher planted area, a leading trade body said on Monday.

December white sugar settled up $7.20, or 1.8%, at $403.20 a tonne.

COCOA

December New York cocoa settled up $64, or 2.7%, at $2,425 a tonne, a one-week high.

March London cocoa settled up 32 pounds, or 2.0%, at 1,673 pounds per tonne, pulling away from an eight-week low of 1,627 pounds set on Friday.

Dealers were keeping a close watch on rising tensions in top grower Ivory Coast ahead of next week's presidential election.

COFFEE

December arabica coffee settled down 1.2 cents, or 1.1%, at $1.0605 per lb, falling to the lowest level since Oct. 2.

Dealers said demand for arabica coffee remains limited due to slow reopening of coffee shops and restaurants, while sales from Brazil remain large due to a weak currency and offers from Central America are rising.

January robusta coffee settled up $8, or 0.6%, at $1,305 a tonne.

"Reports indicate that consumers at home are consuming blends with more robusta and less arabica," said a US broker.