By Onome Amuge.
Raw sugar futures rose to a 12-year high on the Intercontinental Exchange (ICE) before closing slightly down, as dry weather linked to El Nino looked set to lead to a global deficit in the 2023/24 season.
October raw sugar dropped 0.07 cent or 0.3 per cent at 26.91 cents per pound, shortly after setting a 12-year high of 27.59 cents. The contract also gained 2.3 per cent in the week.
October white sugar was down $9.10, or 1.2 per cent at $748.30 a metric tonne.
Market reports showed there is a more than 95 per cent chance that El Nino conditions will continue through the Northern Hemisphere winter.
Moreso, dry conditions are expected for the next 10 days in centre-south Brazil, boosting harvest operations.
Meanwhile,cocoa prices maintained an upward swing as the cocoa market continued to derive support from supply tightness, with a global deficit forecast for both the current 2022/23 season and the 2023/24 season that begins on Oct. 1.
December London cocoa gained 14 pounds, or 0.5 per cent, to 3,121 pounds per tonne after setting a contract high of 3,125 pounds, gaining 3 per cent in the week.
In a similar trajectory, December New York cocoa was up $27, or 0.7 per cent to $3,757 a tonne.
According to market data, supply woes have mainly centred on West Africa, the top growing region for cocoa. News that an invasive virus had been found in Brazil also added to concerns.
“Cocoa prices found further momentum over the past week as supply prospects continued to deteriorate, with Brazil’s announcement that cases of the mosaic virus have been found set to increase concerns further,” BMI, a unit of Fitch Solutions, said.
Dealers said 123,260 tonnes of cocoa were tendered against the September contract that expired a few days ago.
The volume represented 75 per cent of exchange stocks that stood at 163,820 tonnes on Sept. 13.
Coffee marketers also enjoyed a bullish week as December arabica coffee rose 5.15 cents, or 3.3 per cent at $1.5915 per pound and gained 7 per cent in the week.
November robusta coffee gained $61, or 2.4 per cent, at $2,556 a tonne.
Dealers noted some short coverings when the contract broke above the $1.58 level, with Speculators carrying a large short position in arabica.