Raw sugar futures rose by 2.1% due to adverse weather in Brazil and a decline in India’s production forecast, projected at 26.4 million metric tons. Cocoa prices fell by 2.3% as the March contract nears expiration, while robusta coffee prices increased due to slow farmer sales in Vietnam. Arabica coffee prices fell by 0.3% amid a 12% decline in Brazil’s coffee exports in February.
Raw sugar futures increased by 0.39 cents, or 2.1%, reaching 19.25 cents per pound, extending a recent rally driven by adverse weather conditions in Brazil and declining production forecasts in India. Over the past week, prices have surged approximately 6%. Rabobank stated that ongoing concerns regarding Brazil’s rainfall and India’s sugar output are fueling bullish sentiment.
India’s sugar production is projected at 26.4 million metric tons for the current season, revised down from a previous estimate of 27.2 million tons by the Indian Sugar Mills Association. There is rising speculation that India’s one million ton export quota may not be fully achieved. As local prices have risen, Indian mills hold contracts to export 600,000 tons for the 2024/25 marketing year but are hesitant to enter into additional agreements.
In the white sugar market, prices increased by 1%, settling at $538.70 per metric ton. In contrast, cocoa futures in London fell by 148 pounds, or 2.3%, to 6,341 pounds per ton due to market dynamics leading up to contract expiration. Dealers noted that delivery appetite for the March contract indicated a premium of around 108 pounds against the May contract, with an open interest of 2,821 lots.
New York cocoa experienced a decline of 2.2%, closing at $8,172 per ton as the March contract neared expiration, with about 10,000 tons traded during this period. In the coffee sector, Robusta coffee increased by $20, or 0.4%, to $5,528 a ton, underpinned by slow farmer sales in Vietnam, where stockpiles remain substantial. Conversely, Arabica coffee decreased by 0.3%, settling at $3.857 per pound. Brazil’s coffee exports dropped by 12% in February due to limited bean availability, as reported by exporter group Cecafe.
The recent trends in raw sugar and cocoa markets highlight the impact of weather conditions and production forecasts on commodity prices. While raw sugar is benefiting from lower production expectations in India and dry weather in Brazil, cocoa prices are declining due to market conditions. The coffee market showcases variability, with robusta prices rising while arabica declines, further influenced by producer strategies in Vietnam.
Original Source: www.livemint.com
