Raw sugar futures on ICE rallied on Wednesday on trade and technical buying as participants squared their books for year-end, while arabica coffee firmed and New York cocoa steadied in light pre-holiday dealings. "Some participants are trying to keep the market away from sell stops around 14.50 cents a lb," one sugar futures broker said, predicting that the next US Commitments of Traders report will show a larger net long position held by speculators.
Another broker said concerns over tight water availability in India, and its possible impact on production in the world's number 2 sugar producer, could lead mills to focus on stocking rather than exporting. "Indian producers of sugarcane must at least be a bit nervous about the coming season," the broker said. "Low water stocks are making the coming year and even coming months more critical," he added.
"Stocking instead of exports might become a priority. Exports in any case will become more difficult with a firming internal market and firming currency." The global sugar market has been supported by a shift into deficit after years of surpluses.
March raw sugar traded up by 0.35 cent, a 2.4 percent gain, at 15.13 cents per pound at 1446 GMT. March white sugar was up by $8.00, or 2 percent, at $418.60 per tonne. Arabica coffee futures hovered near a 3-week high, as investors covered short positions before the end of the year. March arabica coffee traded up 1.55 cents, a 1.3 percent gain, at $1.2300 per pound, having risen earlier as high as $1.2365 a pound.
March robusta coffee was up $2 or 0.1 percent at $1,519 per tonne. March New York cocoa was down by $5, or 0.2 percent, at $3,206 per tonne on light technically driven selling, and was underpinned by concerns over a strong Harmattan wind across top grower Ivory Coast, which has raised fears about damage to the crop.
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