Raw sugar pares gain after hitting 1-1/2-month high as shorts cover

• Raw sugar was up 0.04 cent, or 0.3pc, at 11.76 cents per lb by 1148 GMT, having hit its highest since Aug. 12 at 11.86.
• Sugar production for the 2019/20 season stood at 20 million tonnes to date, 4.9pc lower than the same period a year earlier.

LONDON: Raw sugar pared gains on Thursday after hitting its highest in 1-1/2 months as funds covered their record net short positions amid views that market fundamentals would tighten. Coffee and cocoa prices recovered.

SUGAR

October raw sugar was up 0.04 cent, or 0.3pc, at 11.76 cents per lb by 1148 GMT, having hit its highest since Aug. 12 at 11.86.

"It seems the lows are in place for the time being.

We are going to go back into a deficit," a dealer said.

Brazilian cane industry group Unica said sugar production for the 2019/20 season stood at 20 million tonnes to date, 4.9pc lower than the same period a year earlier.

"Though this (Unica data) is not really anything new, it could have prompted speculators to cover the net short positions that they previously expanded to a record level," Commerzbank said.

December white sugar was up $1.20, or 0.4pc, at $340.80 per tonne, having hit a six-month high of $342.

COFFEE

December arabica coffee rose 0.9 cent, or 0.9pc, to 101.80 cents per lb.

Arabica prices have steadied since hitting three-month lows in mid-August, amid concerns the 2020 crop in top producer Brazil may not be as large as initially expected, partly due to a prolonged period of depressed prices.

The first flowering of the new Brazilian coffee crop has been spotted over the last few days.

November robusta coffee was up $9, or 0.7pc, at $1,318 a tonne, having hit its highest since late August at $1,319.

Coffee trading remained sluggish this week in Vietnam, the world's top robusta producer, due to a shortage of beans, with traders awaiting the new crop season that begins next week.

COCOA

December New York cocoa was flat at $2,469 a tonne. The contract rose on Friday to a peak of $2,484, its highest since July 26.

Cocoa has rebounded strongly after hitting a 2019 low of $2,165 in August but scope for further gains is limited as the supply outlook improves.

Ivory Coast's 2019/20 cocoa main crop is expected to be between 1.65 million and 1.7 million tonnes, broadly in line with the 1.66 million tonnes of the previous season, a Reuters poll showed.

March London cocoa rose 2 pounds, or 0.1pc, to 1,869 pounds a tonne, having hit its highest since early August at 1,875.