SOFTS-Sugar Rises Amid London Sugar Week Buzz, Cocoa Edges Up

October 4th, 2016


Category: Cocoa, Sugar

Sugars-Full(Reuters) – Sugar futures on ICE rose on Tuesday, climbing after three sessions of consecutive declines, as many market participants gathered in London for a biennial trade dinner on Thursday.

March raws rose 0.18 cent, or 0.8 percent, to 22.86 cents per lb at 1218 GMT.

As London Sugar Week starts, “trade houses are presenting clients with their views of how the market is going to be, the talk appears to be more bullish than bearish, and I think this (firmer prices) is a reflection of that,” said Kona Haque, head of research at ED&F Man.

There are a series of meetings in London this week before Thursday’s dinner.

The mood has been boosted by the prospect of global deficits in both the 2015/16 and 2016/17 seasons with supplies expected to tighten significantly during the first quarter of 2017.

“The forward structure (March/May over 80 points and May/July at 90 points again) continues to support the expectation of a tight beginning to 2017 and a downwards revision of the CS Brazil crop and of Indian production,” said Sucden Financial senior trader Nick Penney in a market note.

December whites were up $3.7, or 0.6 percent, to $592.00 per tonne.

Coffee futures were mixed with the robusta market coming under pressure recently from hedge selling before the harvest in Vietnam.

Harvesting of robusta, of which Vietnam is the world’s largest producer, will begin in the main growing province of Daklak from late October, but could be disrupted by the rainy season which ends in early November, a state forecaster said.

November robusta coffee fell $13, or 0.7 percent, to $1,964 per tonne.

December arabica coffee turned higher by 0.05 cent, or 0.03 percent, to $1.4760 per lb.

Cocoa prices turned higher with London supported by a weak pound.

Heavy rain persisted last week in most of Ivory Coast’s main cocoa growing regions, boosting crop development but causing some farmers to fear flooding and disease as they begin to harvest.

December London cocoa was up 9 pounds, or 0.4 percent, at 2,276 pounds per tonne.

Banks in top producer Ivory Coast are reluctant to boost credit lines to local cocoa exporters struggling to cover extra costs brought on by a surprise hike in the farmgate price, exporters and bankers said on Tuesday, raising the prospect of contract defaults.


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