White sugar prices hit 12-year high on supply concerns
LONDON: White sugar prices on ICE rose to a 12-year high on Wednesday, buoyed by the prospect of tightening supplies as dry weather threatens to curb production in India and Thailand.
India is on track for its lowest monsoon rains in eight years and is expected to ban mills from exporting sugar in the coming season starting in October. The weather has also been dry in Thailand, another leading exporter.
The dry weather has been linked to El Nino, a naturally occurring climate event that the World Meteorological Organization says has a 90% probability of persisting in the second half of 2023.
“The resurgence of the El Nino weather phenomenon … poses concerns for agricultural commodities,” fund manager WisdomTree said in a report on Wednesday, noting that there could be disruption to production of several commodities including sugar.
Investment funds have been increasing long positions in agricultural commodities including white sugar.
October white sugar on ICE was 1.75% higher at $737.60 per metric ton at 1355 GMT after peaking at a 12-year high of $740.20.
Prices for raw sugar also rose, with October futures 1.45% higher at 25.82 cents per lb after touching a two-month peak of 25.89 cents.
London cocoa futures have also risen sharply on supply concerns and set a 46-year high on Wednesday with a third successive global deficit widely forecast for the coming 2023/24 season (October/September).
A Reuters poll of traders and analysts issued on Wednesday had a median forecast for a global deficit of 173,000 metric tons for the 2023/24 season following a deficit of 128,000 tons in the current season.
December London cocoa was up 0.5% at 2,899 pounds a metric ton after setting a 46-year high of 2,900 pounds.
The market has been regularly setting new 46-year highs since late June.
December New York cocoa rose 0.6% to $3,609 a metric ton.
Coffee prices rose, with November robusta gaining 1.6% to $2,489 a metric ton while December Arabica advanced by 1.3% to $1.5505 per lb.
Source Link: https://www.brecorder.com/news/40260643
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