Home »Agriculture and Allied » World » Raw sugar hits one-month peak, arabica coffee falls
Raw sugar futures on ICE climbed to a one-month high on Wednesday boosted by fund short covering while arabica coffee slipped to a two-month low. May raw sugar was up 0.11 cent, or 0.9 percent, at 13.34 cents per lb by 1520 GMT after climbing to a one-month high of 13.35 cents. Fund short covering against the backdrop of recent gains in crude oil has helped to fuel the recent advance. Higher oil prices encourage increased use of cane in Brazil to make biofuel ethanol rather than sugar, and can curb sugar output.

Sucden Financial senior trader Nick Penney said in a note that the market had now moved into a 12.75 to 13.50 cent range from a previous trading band of 12.50 to 13.00 cents. "Weather issues remained a concern and could alter the picture but whilst crops were expected to be lower in EU, Thailand, India and Brazil, stocks are still high and would still need to be absorbed before more remunerative prices for producers were to be achieved next season," he said.

Speculators increased their net short position in raw sugar on ICE Futures US in the week to Jan. 29, US government data showed in a report whose publication had been delayed by the partial government shutdown. May white sugar was up $0.90, or 0.25 percent, at $360.00 a tonne.

May arabica coffee fell 0.65 cents, or 0.6 percent, to $1.0020 per lb after setting a two-month low of 99.85 cents. Dealers said the outlook for prices could hinge on how much production in Brazil falls in 2019, an off-year in its biennial crop cycle, with the market currently oversupplied.

Recent rains have improved prospects for Brazil's 2019 coffee season after below-average precipitation in December and January, but more is needed to guarantee a good crop, producers and analysts said. May robusta coffee fell $8, or 0.5 percent, to $1,530 a tonne.

May New York cocoa fell $43, or 1.8 percent, to $2,307 a tonne, retreating from the prior session's one-month high of $2,369. Dealers said the recent rebound appeared to have run out of steam and the market may have scope to fall back further in the short-term.

Ivory Coast is still on track for a record crop of 2.2 million tonnes for the 2018/19 season versus 2 million tonnes the previous season, mostly due to new plantations, cocoa exporters and pod counters said on Wednesday. May London cocoa was down 15 pounds, or 0.85 percent, at 1,746 pounds a tonne.

Copyright Reuters, 2019


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