Raw sugar slips from 7-week high but tight supplies offer support

LONDON: Raw sugar futures on ICE slipped on Thursday after hitting a seven-week high in the previous session, with the market consolidating amid a broadly positive macro-economic backdrop and tightening supplies.

SUGAR

May raw sugar fell 0.1% to 16.95 cents per lb by 1241 GMT after peaking at 16.99 cents on Wednesday, its highest since Feb. 26.

Dealers said sugar remains well supported, with funds adding to their long positions amid a diminished crop outlook in Brazil and the European Union.

Ukraine's economy ministry has proposed waiving the 50% import duty on 120,000 tonnes of white sugar.

"We now expect a much smaller 2021/22 global sugar surplus of around 2.9 million tonnes, primarily due to the recent crop downgrades in Brazil," said Citi in a note.

"ICE sugar has rallied around 15% month to date. Sugar fundamentals point to more upside, although momentum signals have started to flash overbought," added the bank.

August white sugar rose 0.3% to $464.80 a tonne.

COCOA

July London cocoa rose 0.3% to 1,642 pounds per tonne.

Swiss chocolatier Barry Callebaut reported a drop in first-half net profit as sales volume fell 2.9%, and said Americas chief Peter Boone will become chief executive on Sept. 1.

Ivory Coast's cocoa regulator said it would reimburse exporters for their expenses related to the implementation of a premium meant to combat farmer poverty.

The world's top producer introduced a $400 per tonne premium this season to increase farmer wages. But the measure hit exporters hard, driving up prices for Ivorian cocoa just as the coronavirus pandemic dented global demand.

July New York cocoa fell 0.3% to $2,431 a tonne, having hit a one month high on Tuesday.

COFFEE

July arabica coffee fell 0.2% to $1.3380 per lb. The contract hit a one month high of $1.3545 last week.

Nestle, the world's biggest food group, reported its strongest quarterly sales growth in 10 years, citing stronger demand for coffee, dairy and petcare products.

Coffee was the largest contributor to Nestle's sales growth, with Nespresso portioned coffee up more than 17%.

July robusta coffee fell 0.9% to $1,397 a tonne, having hit a three week high in the previous session.