Raw sugar climbs as physical supplies tighten

Raw sugar futures rose on Tuesday, supported by tightening nearby supplies highlighted by physical buying from Iran, while London cocoa rose on a weaker pound and technical factors lifted arabica coffee. March raw sugar futures rose 0.20 cents, or 0.99 percent, to 20.50 cents per lb by 1530 GMT, supported by an uptick of buying on the physical market.
Iranian importers purchased 250,000 tonnes of Brazilian raw sugar for February shipment, in the first purchases in months, trade sources said on Tuesday. Traders said there was also good buying in the March futures contract ahead of expiry on February 28. "The March to May has actually pushed up today," one dealer said. "But there doesn't seem to be anyone building a particularly large long
position further out at the moment."
The market was also monitoring weather in Europe, with concerns emerging that a dry winter could delay upcoming beet sowing in some regions and negatively impact final crop maturity, INTL FCStone said in a note.
This could dampen plans by Europe's major producers to bolster output by as much as 20 percent ahead of the removal of EU quotas in October.
Thailand, the world's second largest sugar producer, will also stop subsidising sugar production and drop domestic control of consumer prices by the end of the year, a Ministry of Agriculture official said on Tuesday.
May white sugar was down $1.60, or 0.29 percent, at $552.70 a tonne.
May London cocoa gained 7 pounds, or 0.43 percent, to 1,619 pounds a tonne, supported by a weaker pound, while May New York cocoa fell $1, or 0.05 percent, to $1,999 a tonne.
The market remained focused on plentiful global cocoa supplies and a positive outlook for the mid-crop in the world's biggest producer Ivory Coast.
The supply glut in the Ivory Coast has fuelled a rise in the smuggling of beans to neighbouring countries, farmers and exporters said on Tuesday.
In Ghana, the world's second largest cocoa grower, licensed cocoa buyers said on Monday that weeks-long delays in the release of financing by industry regulator Cocobod were hindering their ability to buy the beans needed to fill their contracts.
Arabica coffee rose, supported by technical factors as prices succeeded in holding above key technical levels on Tuesday.
The May contract was up 2.45 cents, or 1.64 percent, to $1.52 per lb.
Robusta May rose $1, or 0.05 percent, to $2,187 a tonne.