The futures contracts of sugar gross in ICE closed down 1.7% this Thursday, amid reports of more rain in producing areas in the Brazil and reduced export activity, while the café Robusta hovered just below its recent 10-year high.
Raw sugar for March closed down 0.32 cents from dollar, or 1.7%, at 18.78 cents per pound, the minimum of a week.
Operators said rains in Brazil continued to improve soil moisture levels in key growing regions and prospects for next year’s sugarcane crop.
They also cited the drop in export activity, with shipments from Brazil falling more than 20% compared to the same period last year.
“The question is whether this is a demand or a supply problem,” said an American broker, referring to the reduction in Brazilian production at this time of year.
Analyst Claudio Covrig said Chinese imports were limited because local prices in the Asian country were lower, hitting refining margins. “The arbitration for importing sugar outside the quota is closed,” he said.
White sugar for March fell $6.40, or 1.3%, to $494.70 a ton.
Robusta coffee for March closed up $9, or 0.4%, at $2,373 a ton. The benchmark’s second position rose to a 10-year high last week of $2,381.
Operators say problems with the supply chain have halted shipments from the largest producer of robusta, Vietnam, this year, with expectations of a 2.7% drop in exports.
Traders noted that the January-March surcharge had increased as traders short of the first contract opted to cover rather than offer the coffee. It was trading around $122 a ton on Thursday.
Arabica coffee for March remained stable at $2.2885 per pound.
Source From: Moneytimes
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