LONDON: Raw sugar futures on ICE edged up on Tuesday, heading back near a recent four-month peak as the market continues to assess the extent of damage to the cane crop in top producer Brazil after last week’s frosts.
October raw sugar rose 0.8% to 18.29 cents per lb by 1319 GMT, having hit its highest since late February at 18.49 cents last Thursday. The contract gained 6.9% last week.
Dealers said sugar looks well supported, noting that the frosts were extensive and the cane was already under stress from the prolonged dry weather earlier this season.
They cautioned, however, that demand remains poor and that India might conclude further sales without government subsidies if prices remain above 18 cents. Sugar production in the European Union is forecast to rise in the 2021/22 season leading to an increase in stocks of the sweetener, the European Commission said in its short-term outlook.
August white sugar rose 0.3% to $452.90 a tonne, edging back towards a three-week high of $461.40 set last Thursday.
September arabica coffee fell 0.9% to $1.5165 per lb, having touched its lowest in two weeks at $1.4990.
Dealers said losses were on the cards for arabica, with most of the coffee areas in Brazil having been spared frost damage.
Commerzbank raised its fourth-quarter arabica price outlook to $1.45 per lb given that prolonged dryness in Brazil this season could have damaged next season’s crop.
The International Coffee Organisation bumped up its 2020/21 global coffee surplus forecast in its June monthly report, but said production will likely fall below world demand next season.
September robusta coffee rose 1.5% to $1,713 a tonne, having hit a 2-1/2 year high of $1,737 on Friday.
September New York cocoa rose 0.2% to $2,324 a tonne, having hit an eight-month low last week.
Commerzbank lowered its fourth-quarter average price forecast for New York cocoa by $100 to $2,400 a tonne, citing excess supplies. September London cocoa fell 0.8% to 1,614 pounds a tonne.