Raw sugar futures shot up to close at the highest level in more than three decades on Wednesday, as a massive cyclone hit Australia, one of world's top sugar exporters, deepening concerns about tight global supplies. Cocoa futures on ICE rose to just below a one-year peak, buoyed by the risk premium associated with turmoil in top grower Ivory Coast.
While arabica coffee nudged up to close at a 13-1/2 year high in thin dealings on some concern about truckers' plans to strike in top washed-arabica producer Colombia. It is feared the Category five Cyclone Yasi will devastate Australia's cane crop, damage farming infrastructure and hit the top two sugar ports, further decimating the country that's been inundated by heavy torrential rains induced by a strong La Nina weather anomaly.
ICE March raw sugar soared 1.35 cents or 4 percent to close at 35.31 cents per lb, the strongest settlement for the spot contract since November 1980, after hitting a session peak at 36.08 cents a lb. Volume was more than double the 30-day average. The tightness in supply is being reflected in the expanding spread, or difference, between the spot March and second position May raw sugar contracts on ICE Futures US The March contract closed at a 2.55-cent premium to May, from 2.45 cents Tuesday.
Cocoa futures firmed as dealers continued to weigh the impact Ivory Coast's month-long cocoa export ban could have on global supplies while the political crisis there continued. ICE benchmark March cocoa rose $39 to settle at $3,352 per tonne, below last week's one-year peak of $3,420 per tonne. Open interest in ICE cocoa futures climbed to a near-three-year high for the second straight day on February 1 as the Ivorian export ban encouraged new longs.
Coffee prices were firm with arabica coffee climbing to a fresh 13-1/2 year high in thin dealings lifted by the expectation for a trucker strike in Colombia. Robusta touched its highest in 2-1/4 years. ICE March arabicas closed up 1 cent at $2.5040 per lb, the strongest settlement for the spot contract since June 1997.
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