Sugar prices slip, coffee falls from 10-year highs
- March arabica coffee fell 0.8% to $2.4020 per lb
- March raw sugar fell 0.8% to 19.97 cents per lb
LONDON: Raw sugar prices on ICE fell on Wednesday as the market retreated from strong gains in the prior session but remained underpinned by worries over output prospects in top producer Brazil.
Coffee prices came off 10-year highs, while London cocoa retreated from a one-month peak.
March raw sugar fell 0.8% to 19.97 cents per lb at 1325 GMT, after gaining 1.4% on Tuesday.
"The Brazilian statistics agency Conab pegs total sugar production for the centre south at 30.7 million tonnes (this season) - (a) very large drop in production compared with the record 38 million tonnes produced last season," said a dealer.
Citi upgraded its average price forecast for 2022 from 19.5 cents per lb to 20.3 citing persistent market tightness through the 2022/23 crop year.
"The increasing probability for (a) La Nina (weather phenomenon) weighs heavily on next year's output (from Brazil). (India) exports should remain slow (versus) the past years when the export subsidy still existed," it said.
March white sugar rose $10.40 to $518.40 a tonne.
Arabica coffee heads back towards multi-year highs
March arabica coffee fell 0.8% to $2.4020 per lb, after peaking at $2.4475 on Tuesday - its highest since October 2011.
The market remains plagued by worries over container shipping backlogs in top producer Brazil, fears over farmer delivery defaults in Brazil and beyond, falling stocks and high fertiliser prices.
January robusta coffee fell 0.1% to $2,294 a tonne, having hit $2,327 on Tuesday - its highest since August 2011.
March London cocoa fell 1.1% to 1,734 pounds, having hit a one-month high of 1,758 pounds on Tuesday as sterling slumped.
Dealers said top producers Ivory Coast and Ghana are selling at these price levels and have seen heavier-than-normal rainfall since August.
"Global cocoa balances are shifting from surplus to deficit in 2022, but we maintain a 2022 average (price estimate) of $2,620 a tonne versus a 2021 price of $2,500," Citi said.
The bank sees the global cocoa deficit at 75,000-100,000 tonnes in 2021/22, but said the market is still working off the 300,000 tonnes surplus from 2020/21.
It also cited slowing growth in China, uneven growth in Europe, and above normal rainfall in West Africa recently as factors keeping price gains in check.
March New York cocoa fell 1.1% to $2,539 a tonne.
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