Sugar futures slip after hitting contract highs, cocoa retreats

LONDON: Raw and white sugar futures on ICE slipped on Thursday after hitting contract highs in the previous session amid nearby supply tightness, while cocoa prices retreated.

SUGAR

March raw sugar slipped 0.2% to 16.68 cents per lb at 1331 GMT, having hit 17.05 cents on Wednesday, a March contract high and the highest for a front month raws future since April 2017.

March white sugar, which expires on Friday, fell 0.4% to $477.60 a tonne, having hit $479.50 on Wednesday, also a contract high and the highest for a front month whites contract since April 2017.

Dealers said nearby supplies were tightening amid a global shipping container shortage, with March raws and whites futures trading at a wide premium to May, and the curve backwardated for some months beyond that.

Looking further ahead though, the global sugar market is expected to shift into a 5.18 million tonne surplus in the 2021/22 season, driven partly by higher output in Thailand and India, Tropical Research Services said.

COCOA

March New York cocoa slid 3.3% to $2,590 a tonne, having hit the highest since mid-December on Wednesday after widening to a premium of nearly $200 a tonne over May on strong interest in the nearby contract.

Dealers said the jury is still out whether some companies are positioning to receive cocoa at the expiration of the March New York contract, as happened recently.

Facing poor demand, Ivory Coast has reduced a quality premium that cocoa exporters pay for the mid-crop harvest by 320 pounds ($443) per tonne to turn it into a discount.

March London cocoa fell 0.5% to 1,763 pounds per tonne, having hit a three-week high of 1,775.

COFFEE

May arabica coffee edged up 0.1% to $1.2325 per lb, having hit its weakest since Jan. 12 on Wednesday.

May robusta coffee slipped 0.6% to $1,366 a tonne, having hit its highest since Jan. 4 on Wednesday.