NEW YORK/LONDON: Raw sugar futures on ICE rose more than 3% on Thursday, hitting their highest in nearly a month as commodities and global equities steadied at lofty levels and investors remained nervous about harvest prospects in top producer Brazil.
May raw sugar settled up 0.52 cent, or 3.3%, at 16.38 cents per lb.
Dealers cited growing expectations that sugar production in Brazil will struggle to reach the previously predicted 36 million tonnes.
They said sugar is likely to continue to push higher in the near term, though strong exports out of India will eventually cap gains.
The US Department of Agriculture said Thailand’s 2021/22 sugar production should rebound 40% from 2020/21 to 10.6 million tonnes.
Egypt’s state buyer ESIIC set a tender for 100,000 tonnes of Brazilian sugar.
May white sugar settled up $14.00, or 3.2%, at $455.60 a tonne at the expiry of the contract, with delivery seen at around 132,000 tonnes.
May arabica coffee settled up 0.6 cent, or 0.5%, at $1.327 per lb, its fourth consecutive gain.
Investors are eyeing a looming arabica deficit as top producer Brazil enters an off-year in its biennial production cycle. The deficit is overshadowing pressure from a generally weak Brazilian real.
“The drop in the coming Brazil crop is fully in the market in our opinion, and the pressure will likely be felt in the physical market (more) than in the futures market, which has a bulky volume of certified stocks,” Rabobank said in a note this week.
Broker and analyst StoneX said it expects demand recovery in the United States, the world’s largest coffee consumer, citing the progress in the vaccination campaign.
May robusta coffee settled down $2, or 0.1%, at $1,363 a tonne.
Domestic coffee prices in top robusta producer Vietnam edged higher this week.
May London cocoa was flat 1,606 pounds per tonne, having hit a five-month low on Monday on surplus supplies.
Europe’s first-quarter cocoa grind, a measure of demand, fell 3% from a year earlier to 357,815 tonnes, the European Cocoa Association said on Wednesday.
May New York cocoa settled down $8, or 0.3%, to $2,413 a tonne.
North American grind data is expected later on Thursday.
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