LONDON: Raw sugar futures on ICE fell on Thursday after hitting a 3-1/2-year high as traders paused for breath, but the retreat was seen as temporary given tightening supplies and fund buying appetite.
March raw sugar fell 1.8% to 15.96 cents per lb at 1452 GMT, after climbing to a peak of 16.33 cents, its highest since May 2017.
Sugar has been boosted this year by strong fund buying appetite, with investors betting on a global economic recovery and broadly optimistic over agricultural commodities, especially those with tightening supplies.
Dealers said many will see Thursday’s dip in sugar as a buying opportunity, adding producers are cautious about selling given the funds, who are mostly long, appear to be in control.
Sugar supplies are expected to remain tight at least until April, when output in top producer Brazil may start to pick up again.
The run-up in prices should however lead to a pickup in exports from India, where production has been well above year-earlier levels.
March white sugar fell 0.8% to $439.80 a tonne.
March arabica coffee rose 0.7% to $1.2380 per lb. The contract closed down 3.4% on Wednesday after hitting its lowest in nearly a month.
Rising certified exchange stocks and renewed weakness in Brazil’s real currency are weighing on coffee, dealers said.
Certified stocks rose every day this week.
March robusta coffee fell 1% to $1,342 a tonne, having hit its lowest in nearly a month.
Coffee trade was sluggish across Asia’s top robusta producers, with Vietnam seeing low activity on thin demand while Indonesia remained muted due to low stockpiles, traders said.
Dealers said robusta’s technical signals are starting to look bearish.
March New York cocoa rose 1.4% to $2,478 a tonne, having hit a 2-1/2 week low amid worries over weakening demand.
March London cocoa rose 1% to 1,647 pounds per tonne, having hit a 2-1/2 week low.
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