LONDON: White sugar futures on ICE hit their highest in 5-1/2 years, with dealers worried Indian exports might not reach the 10 million tonne cap for this season, while raw sugar prices also rose.
SUGAR
August white sugar rose 2.9% to $595 a tonne at 1233 GMT, having hit its highest since October 2016 at $597.20.
“First indications are that the new (Indian) system for acquiring ‘permission to export’ (sugar) is slow and onerous. As a consequence, we think exports may not reach the full 10 million tonnes allowed,” said broker Marex Spectron.
It also noted the premium for white sugar versus raws is shooting ever higher, indicating that some refineries are working at less than full capacity, or that the market has under-estimated consumption.
July raw sugar rose 2% to 19.68 cents per lb.
Dealers said top producer Brazil looks likely to continue favouring ethanol production over sugar near term, with energy prices remaining lofty, tempting cane mills in Brazil to produce more of the cane-based biofuel and less sugar.
COFFEE
July arabica coffee rose 1.6% to $2.3615 per lb, after hitting the highest since February at $2.4200 on Thursday.
Dealers said the market remains well supported by tight supplies, with ICE stocks continuing to fall towards the 1 million bag mark.
July robusta coffee was flat at $2,136 a tonne.
COCOA
July New York cocoa rose 1.1% to $2,496 a tonne.
ICE cocoa inventories rose to an 8-month high of 5.42m bags at last count.
September London cocoa fell 0.8% to 1,779 pounds per tonne.
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