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- Dubai 05:24 06:37 12:34 15:53 18:25 19:38
Raw sugar futures on ICE continued to rise and are within sight of a 29-year high underpinned by tight supplies while cocoa and coffee were little changed in light volumes. The raw sugar market appeared to be in a holding pattern with persistent resistance at 30 cents a pound (lb) and a lack of physical buying at high prices dampening demand, brokers said.
Benchmark ICE front-month raw sugar futures hit a 29-year peak of 30.40 cents a lb. ICE March raw sugar futures were down 0.19 cent or 0.65 per cent to 29.21 cents a lb while Liffe March white sugar was up $1.80 (Dh6.6) or 0.25 per cent to $736.30 per tonne in moderate volume of 3,792 lots.
"We are running out of oxygen above 30 cents," said James Kirkup, director and head of sugar brokerage at Fortis Bank Nederland in London. "We need some sort of catalyst to take us through that number." Dealers said a delay in an Egyptian buying tender signaled that buyers were expecting prices to fall. All eyes were now on coming tenders to see if buyers would be prepared to re-stock at current high prices.
Dealers said the sugar market was expected to remain tight for at least another couple of months, although the supply crunch should ease slightly later this year as the new centre-south Brazilian harvest comes onstream.
Raw sugar futures surged to 29-year highs after disappointing crops in leading producers Brazil and India. Sugar prices will reach historic highs by the end of March as a global supply shortage tightens its grip on the market and increases investor fervour for the sweetener, a Reuters poll showed.
ICE cocoa and coffee were little changed in thin turnover, and dealers said cocoa futures risked further long liquidation and talked of a subdued demand outlook.
EIGHT MILLION TONNE GLOBAL DEFICIT
Analyst FO Licht revised up its estimate of a global sugar deficit to around eight million tonnes in the crop year to September from six million earlier because of a supply crunch, managing director Christoph Berg said yesterday.
But the market could breathe a sign of relief in the next crop year, with production likely to rebound in many cane growers, Berg said in Manila.
Worries about a supply deficit, falling output in main consumers, particularly India, and a wall of investment money have driven raw sugar futures to their strongest.
Supply problems in India, Pakistan, Thailand and Indonesia supported revision of the global deficit in 2010, but physical buying was limited at current high prices, he added.
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