Markets

London cocoa hovers near 2-month high, white sugar also climbs

Published February 7, 2018 Updated February 7, 2018 03:11pm

COCOA

May London cocoa was up 17 pounds or 1.2 percent at 1,491 pounds a tonne by 1419 GMT, just below a two-month high of 1,493 touched on Tuesday.

Dealers noted the market's ability to sustain the gains was boosting sentiment, while a weaker British pound was also lending support.

"You're seeing the pound slip back a little bit against the dollar, which is underpinning London," said one dealer.

May New York cocoa was up $21, or 1 percent, at $2,086 a tonne.

The mood in the market has also recently improved on signs that port arrivals in top grower Ivory Coast could be slowing down, dealers said.

"I think it does highlight the tail of the main crop coming through," the dealer said.

Market participants were closely monitoring weather in West Africa after recent dryness, although dealers said this is unlikely to curb the main crop but could have some marginal impact on the mid-crop.

SUGAR

March white sugar rose $3.40, or 1 percent, to $361 per tonne, lifted by technical buying.

On Tuesday, the premium for March white sugar over March raw sugar dropped to its lowest since September, indicating depressed processing margins for refiners.

Prices have been pressured by a looming global supply glut amid expectations for sharply higher production from the EU, Thailand, Pakistan and India.

However, dealers said a large short position held by speculators was supportive as it left the market vulnerable to short covering.

March raw sugar was up 0.07 cent, or 0.5 percent, at 13.91 cents per lb.

Prices rose to a three-week high of 14.04 cents on Tuesday but then fell back before the close as speculative short-covering was met by producer selling.

COFFEE

March arabica coffee rose 0.20 cents, or 0.2 percent, to $1.2305 per lb.

March robusta coffee was down $9 or 0.5 percent at $1,795 a tonne.

The International Coffee Organization on Wednesday raised its forecast for global coffee production in 2017/18 to 158.93 million 60-kg bags, from a previous forecast of 158.78 million.

A growing number of farmers in Latin American nations renowned for their high-quality arabica coffee are starting to plant cheaper robusta.

 

Copyright Reuters, 2018