Raw sugar gains on supply concerns, rising oil prices
Raw sugar futures on ICE rose 1.4% to 14.93 cents/lb amid concerns over tighter global supplies, possible El Niño-related deficits, and higher oil prices encouraging ethanol production over sugar. EU sugar output may decline 8-10% next season, while white sugar gained 0.6% to $443.90 per tonne.
LONDON: Raw sugar futures on ICE rose on Thursday on gathering concerns over supplies and as oil prices rose, tempting cane mills to produce more ethanol fuel and less sugar.
SUGAR
Raw sugar rose 1.4percent to 14.93 cents per lb at 1442 GMT, having settled down 1.9percent on Wednesday. Dealers said that the EU, the world’s third-largest sugar producer, could see output fall 8percent to 10percent next season due to reduced plantings, while there are some concerns over adverse weather in the US
More broadly, there are concerns the sugar market could flip into deficit next season due to an El Nino weather event and the risk that energy prices will stay high, driving cane mills to produce even more ethanol at the expense of sugar.
Crude oil prices rose earlier after a Reuters report signalled complication to US-Iran peace talks. White sugar rose 0.6percent to USD443.90 a ton.
COCOA
London cocoa fell 2.2percent to 2,863 pounds a metric ton, remaining well below the 3-1/2-month high of 3,627 pounds set last week. An improving outlook for production in top grower Ivory Coast is weighing on cocoa. Limiting losses, however, are improved demand prospects. After a year of smaller bars, extra wafers and chocolate alternatives, at least one major chocolate maker is putting the cocoa back in — and others may follow suit, according to industry participants and experts. New York cocoa fell2.4percent to USD3,797 a ton.
COFFEE
Arabica coffee rose 1.3percent to USD2.6375 per lb, not far off a 1-1/2-year low of USD2.5565 hit on Tuesday. The prospect of a bumper crop in top grower Brazil is keeping coffee prices on the defensive. Brazil’s coffee output from the 2026 harvest is forecast to rise by 18percent from last year to a record 66.7 million 60kg (132.3 lb) bags, national crop agency Conab said.
Arabica production is expected to increase by 28percent to 45.8 million bags while robusta output is forecast to edge up by 0.8percent to 20.9 million bags, added the agency.
Limiting losses in coffee nearer term, however, exchange-certified stocks continued to decline and reached the smallest level since February.
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Source : Business Recorder
