Raw sugar futures rose significantly due to dry weather in Brazil and reduced production forecasts from India, with prices settling at 19.25 cents per lb. Cocoa futures fell 2.3%, while Robusta coffee prices increased by 0.4% driven by slow sales from Vietnam. The coffee market presents mixed trends with decreasing Arabica prices and lower Brazilian exports.
On March 13, 2023, raw sugar futures experienced an increase, driven by adverse weather conditions affecting Brazil and declining production forecasts for India. The futures settled at 19.25 cents per pound, an increase of 2.1% and approximately 6% over the previous week. Rabobank noted, “Bullish price development reflected continued concerns about rainfall volumes in Brazil and a deterioration in sugar production expectations in India.”
The Indian Sugar Mills Association estimated a production reduction to 26.4 million metric tons for the current season, down from 27.2 million tons. Furthermore, sentiment suggests that India’s one million ton export quota may not be fulfilled in its entirety. Local price increases have led to Indian mills being hesitant to enter new export agreements, having already committed to 600,000 tons for the 2024/25 marketing year. White sugar prices also increased to $538.70 per metric ton, up by 1%.
In contrast, London cocoa futures declined by 2.3%, settling at 6,341 pounds per ton. Dealers reported increased appetite for deliveries against the March contract, which is set to expire soon, trading at a premium of approximately 108 pounds to the May contract. The open interest on the March contract stands at 2,821 lots, equivalent to 28,210 tons. In New York, cocoa futures also fell by 2.2% to $8,172 a ton amid impending contract expirations.
Robusta coffee prices rose by $20, or 0.4%, reaching $5,528 a ton. This market strength is attributed to slower sales from farmers in Vietnam, where it is estimated that they retain around 30% to 40% of their stock, anticipating higher prices. Meanwhile, the Arabica coffee market declined by 0.3% to $3.857 per pound, and Brazilian coffee exports decreased by 12% in February due to low bean availability, as reported by Cecafe.
In summary, the raw sugar market is influenced significantly by production concerns in India and adverse weather in Brazil, leading to notable price increases. Conversely, cocoa is facing downward pressure with expiration concerns of key contracts contributing to its price drop. The coffee market shows mixed trends, with Robusta prices rising on limited supply while Arabica prices decline amidst decreasing exports from Brazil. Overall market dynamics reflect intricate interdependencies among supply, weather, and local pricing strategies.
Original Source: www.livemint.com
