The futures contracts sugar Crude oil prices at ICE hit a six-year high on Tuesday on continuing concerns about tight supply, highlighted by a worsening production outlook in India.
THE coffee arabica, meanwhile, rose nearly 7% to a three-month high.
Sugar
March raw sugar closed up 0.55 cents, or 2.6%, at 21.76 cents a pound, after hitting its highest since late 2016 at 21.82 cents.
THE Indiathe world’s second-largest sugar exporter, is expected to produce 34 million tonnes of the sweetener in 2022/23, down 7% from the previous forecast, a top trade body said.
Traders said sugar prices were being boosted by this production outlook, along with concerns that the biggest exporter, the Brazilcould also produce less if its energy policy improves the profitability of ethanol.
Brazil’s finance ministry said it expects federal fuel taxes to be reinstated in March, which would benefit ethanol.
A global sugar deficit of 1.01 million tonnes is projected for the 2023/24 season, ending a run of three consecutive surpluses, said Green Pool analysis.
March white sugar rose $12.00, or 2.1%, to $580.70 a tonne.
Coffee
March arabica closed up 11.35 cents, or 6.7%, at $1.8175 a pound after hitting its highest since early November at $1.8280.
Traders reported a strong short covering move by funds – which had been carrying a large short position – as the market broke resistance around $1.75/lb.
“Short selling has been squeezed as market fundamentals look better, with global stock clearly not as robust as it looked,” a US broker said, citing subdued increases in certified stocks and near-daily withdrawals.
Operators also cited strong differentials for Brazilian coffee.
March Robusta coffee rose $70, or 3.4%, to $2,107 a tonne.
Indonesia exported 16,152.89 tonnes of Sumatra robusta coffee beans from Lampung province in December, down 51% year-on-year.
Source: Moneytimes
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