Markets

White sugar ends higher as nearby premium climbs

Published July 4, 2018 Updated July 4, 2018 06:31pm

Raw sugar, arabica coffee and New York cocoa markets were shut on Wednesday for US Independence Day.

SUGAR

* August white sugar ended $4.50, or 1.3 percent, at $341.10 a tonne.

* Dealers said the market was supported by some tightness in white sugar that can be tendered against the contract even though overall supplies remain ample.

* August's premium to October <LSU-1=R> peaked at around $10 from about $8 at the close on Tuesday.

* "That is the highest the Aug/Oct2018 spread has ever traded but that strength is more likely to be the perceived lack of availability of prompt deliverable refined sugar at current prices - even through there is no shortage of white sugar per se (both refined and lower quality whites) at the right price," James Liddiard of consultants Agrilion said in a market note.

* The scope for any major rebound appears limited, however, particularly if there were to be significant exports from India.

* "India is expected to see yet another significant domestic surplus next season, this follows roughly a 7 million tonne surplus this season," ING said in a market note.

* "The issue for the Indian industry however is that they have struggled to export this surplus to the world market so far," the bank added.

* The recent decline in hydrous ethanol prices in Brazil should also keep a lid on prices, potentially encouraging more use of cane to make sugar rather than the renewable fuel.

* Brazil sugar exports fell almost one million tonnes in June from the same month last year as mills held back sales with prices hovering near multi-year lows, trade ministry data showed on Tuesday.

COCOA

* September London cocoa closed 1 pound, or 0.1 percent, lower at 1,798 pounds a tonne.

* Alassane Ouattara, president of top cocoa producer Ivory Coast, dissolved the government on Wednesday, according to a statement from the presidency, amid tensions with his party's partner in the governing coalition.

COFFEE

* September robusta coffee ended $4, or 0.2 percent, to $1,689 a tonne.

* Brazil green coffee exports rose in June to 2.16 million bags, up from 1.91 million in the same month last year, trade ministry data showed on Tuesday.

Copyright Reuters, 2018