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Raw sugar steadies, arabica coffee down

Wed Feb 05 2020

 

Raw sugar futures on ICE steadied on Wednesday, having hit a two-year high in the previous session on dwindling output, while arabica coffee sank to a three-month low. March raw sugar ??was down 0.01 cents, or 0.1%, at 14.71 cents per lb by 1539 GMT, having touched a two-year peak of 15.13 cents on Tuesday.

 

Speculators are rolling their net long position and this is capping gains in March sugar, dealers said, adding that the overall uptrend is intact with production falling in key regions such as India, Thailand and the European Union.

 

A Sucden Financial report said that Brazil can ramp up output and compensate for poor production elsewhere but is unlikely to do so until later this year, leaving trade flows tight for now.

 

“We still think the market will have another leg higher, possibly to 15.50 in the short term," it said.

 

Brazilian mills have fixed prices for 12.047 million tonnes of sugar through Jan. 31 in the 2020/21 season, compared with 10.208 million tonnes last season, Archer Consulting said.

 

March white sugar was up $0.40, or 0.1%, at $414.10 a tonne after touching a 2-1/2 year high of $420 on Tuesday.

 

Bangladesh Sugar and Food Industries Corporation is seeking to import 100,000 tonnes of sugar in a tender to secure supplies for the Muslim fasting month of Ramadan, an official from the state buyer said.

 

March arabica coffee was down 0.25 cents, or 0.25%, at 97.90 cents per lb, having hit a three-month low of 97.75 cents.

 

The recent strong rise in ICE exchange stocks has abated for now, helping to underpin prices, though record output is still expected from top producer Brazil this year.

 

“We'll probably find a (price) bottom here because certified stocks have started to fall again and demand is doing very well. We expect that to continue," said Rabobank analyst Carlos Mera.

 

Global coffee exports edged up 0.3% year on year in December to hit 10.30 million 60 kg bags, the International Coffee Organization said.

 

March robusta coffee fell $7, or 0.5%, to $1,283 a tonne, having touched a three-month low of $1,280.

 

March London cocoa was up 35 pounds, or 1.8%, at 1,963 pounds a tonne.

 

Ghana and Ivory Coast's $400 a tonne premium for 2020/21 cocoa sales is prompting investors to go long to secure cheaper supply, in this case exchange stocks that do not incur the premium, Citi said in a report.

 

Elsewhere, concerns over dry weather in Ivory Coast are underpinning cocoa. March New York cocoa rose $25, or 0.9%, to $2,782 a tonne.

 

Source: Reuters

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