Sugar prices rise in London

Sugar futures edged higher on Monday, rebounding from early losses, buoyed by a weaker dollar and underpinned by constructive fundamentals. Cocoa futures on ICE were also higher, building on last weeks gains, while coffee showed mixed trends with Vietnamese selling weighing on robustas.
"The fundamentals for sugar remain constructive," James Kirkup, senior sugar broker with Fortis Commodity Derivatives, said. May raws on ICE rose 0.09 cent to 12.97 cents a lb by 1735 GMT, well above the days low of 12.76 cents. An average raw sugar price of 13-14 cents per lb looks justifiable in 2009 given the tight supply and assuming no big shifts in the exchange rate between Brazils real and the dollar, a senior analyst at Rabobank said.
Raw sugar prices have risen from a low of 12.42 cents a week ago on the May contract, with the advance driven partly by reduced production prospects in top consumer India. India is expected to produce 15.7 million tonnes of sugar in the year to September as cane shortages mount, and stocks will shrink to 2 million tonnes on October 1 when the new season begins, a trade official said on Monday.
"Most mills have closed and some are on the verge of closure and my latest estimate is of 15.7 million tonnes," Shanti Lal Jain, director general of the Indian Sugar Mills Association, told Reuters at the Reuters Food and Agriculture Summit. White sugar futures in London ended slightly higher with May up $1.30 at $396.50 a tonne.
Cocoa futures on ICE were higher although the strength of sterling against the dollar helped to keep a lid on prices in London, dealers said. May futures on ICE settled $47 higher at $2,428 a tonne. The contract traded as low as $2,220 a week ago. May cocoa in London ended unchanged at 1,861 pounds a tonne.
Dealers said there was still concern the economic downturn could curtail demand for cocoa with first-quarter grind data, to be issued in early April. Robusta coffee futures in London were slightly down, weakened by Vietnamese producer selling while arabica futures on ICE edged up, boosted by a weaker dollar. May robustas settled $19 lower at $1,530 a tonne while May arabicas rose 0.70 cent to $1.1085 per lb.