Raw Sugar Prices Rise Amid India and Brazil Production Concerns; Cocoa Falls
Raw sugar futures rose by 2.1% amidst dry weather in Brazil and lower production forecasts in India. Cocoa futures declined, while robusta coffee prices increased due to slow sales in Vietnam. Meanwhile, Arabica coffee and Brazilian coffee exports both fell.
On March 13, 2023, raw sugar futures experienced a significant rise, influenced by dry weather conditions in Brazil and a decline in production forecasts for India. The futures settled at 19.25 cents per pound, marking an increase of 0.39 cents or 2.1%, which contributed to an overall weekly gain of approximately 6%. According to Rabobank, concerns regarding rainfall in Brazil and the negative adjustments in India’s production outlook were pivotal factors driving prices upward.
India’s sugar production is projected at 26.4 million metric tons for the current season ending in September, a decrease of 2.94% from the previous estimate of 27.2 million tons, as stated by the Indian Sugar Mills Association. Market sentiment suggests that India’s export quota of one million tons may remain unfulfilled. Local sugar mills have committed to exporting 600,000 tons for the 2024/25 marketing year but are hesitant to finalize additional contracts due to rising local prices. Meanwhile, white sugar prices rose by 1%, reaching $538.70 per metric ton.
In the cocoa market, London cocoa futures fell by 148 pounds, or 2.3%, closing at 6,341 pounds per ton. Traders indicated a willingness to take delivery against the March contract, which expires soon, at a premium of around 108 pounds to the May contract. The open interest for the March contract stood at 2,821 lots, approximately 28,210 tons. In New York, cocoa futures declined by 2.2%, amounting to $8,172 per ton, with the March contract also set to expire shortly.
Robusta coffee prices increased by $20, or 0.4%, reaching $5,528 per ton, primarily due to slow sales patterns among farmers in Vietnam, the leading producer. A trader in Vietnam’s coffee region noted, “Farmers may still have 30% to 40% of their stocks left. They are hoping for higher prices.” Conversely, Arabica coffee prices dipped by 0.3%, settling at $3.857 per pound. Furthermore, Brazil’s coffee exports declined by 12% in February due to limited bean availability, as reported by exporters group Cecafe.
In summary, raw sugar futures are rising due to adverse weather in Brazil and reduced production expectations in India. Cocoa futures are declining, while coffee prices present a mixed trend. The market’s current dynamics indicate volatility influenced by global agricultural conditions and trade constraints.
Original Source: www.livemint.com
