Raw sugar futures on ICE struck a seven-week high on Thursday, boosted by fund buying and diminished production prospects in top consumer India. The market has surged during the last few days as a shortage of cane in the major producing state of Maharashtra prompted some mills to stop crushing and drove up domestic prices.
March raws were up 0.15 cents or 0.7 percent at 21.04 cents a lb at 1515 GMT after peaking at 21.18 cents, the highest for the front month since mid-November. Dealers said funds were now beginning to rebuild a net long position, which had been scaled back significantly during the fourth quarter of 2016. Sentiment has been boosted by the prospect of tightening supplies in the first quarter of this year, a trend accentuated by production woes in India.
India's sugar production in 2016/17 is likely to fall to 22 million tonnes, down 4.3 percent from an earlier estimate, industry officials told Reuters. India is not planning to cut import duty on the sweetener at least in the near term, Trade Minister Nirmala Sitharaman told reporters on Thursday. "It means that stocks will have to be relied upon in the meantime and these could reach precariously low levels should inflows of sugar be reduced during the current harvesting period," said Sucden Financial senior trader Nick Penney.
March whites were up $2.20, or 0.4 percent, at $552.40 per tonne. Robusta coffee fell with the recent run-up in prices helping to generate a pick-up in farmer selling in top producer Vietnam. March robusta coffee was off $12 or 0.55 percent at $2,153 a tonne. Farmers in Vietnam released beans to cash in on rising prices before the country's biggest holiday, traders said on Thursday.
"Despite a harvesting delay due to rainfall, farmers are actually selling more than usual as they need cash for Tet and as prices are attractive," said Phan Hung Anh, deputy director of Anh Minh Company in Daklak, Vietnam's top growing province. Tet, or the Lunar New Year, is Vietnam's biggest public holiday and will last from January 26 to February 1 this year.
March arabica coffee futures rose 1.60 cents or 1.1 percent to $1.4340 per lb. Cocoa futures were lower with the market back on the defensive after the prior session's rebound. Dealers said supplies remained ample with a global surplus anticipated in the current 2016/17 season. March New York cocoa was off $15 or 0.73 percent at $2,222. The front month dipped to a low of $2,119 on Tuesday, its weakest since April 2013. May London cocoa fell 18 pounds or 1 percent to 1,802 pounds a tonne.