LONDON: Raw sugar futures on ICE steadied on Monday after falling to their lowest in almost four months in the prior session, as concerns about inflation and a global economic slowdown eased.
SUGAR
July raw sugar edged up 0.1% to $18.38 cents per lb at 1153 GMT, after slumping to its weakest since March 1 on Friday at 18.23 cents.
Dealers said sugar may attempt to build a base around current levels as funds are unlikely to be aggressive sellers near term and end-users still have some buying to do.
German sugar producer Suedzucker plans “significant” price hikes to offset rising costs and prepares to shift to coal as Russian gas supplies to Western Europe slow, the Mannheimer Morgen newspaper reported.
August white sugar fell 0.2% to $542.60 a tonne.
COFFEE
September arabica coffee rose 0.3% to $2.2385 per lb, after slipping to a one week low of $2.2225 on Friday.
ICE certified arabica stocks fell on Friday to just over 955,000 bags, their lowest since early 2000.
Citi said the drop in ICE certified stocks is helping prompt price rallies in coffee in the short term.
It added, however, that coffee’s fundamentals - namely, a looming surplus that it pencils at 3.2m bags for 2022/23 - could lower prices to around $2.0/lb by the year end.
September robusta coffee fell 0.2% to $2,041 a tonne. COCOA September New York cocoa rose 0.8% to $2,452 a tonne. “World cocoa grindings are at risk of slowing (or contracting) due to the Russia/Ukraine conflict hindering regional demand as well as headwinds to global GDP. This drives our bias for a deflationary price regime in the next 9-12 months,” said Citi. It added, however, that cocoa is unlikely to fall to the $2,000-$2,200 range as significant supply growth in the 2022/23 season is not a sure thing, especially with fertilizer supply chain issues. September London cocoa rose 0.6% to 1,771 pounds per tonn.
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