BY ONOME AMUGE
Raw sugar prices recorded gains on the Intercontinental Exchange (ICE), following speculations that Russia’s persistent war with Ukraine could provoke the International Energy Agency (IEA) to shut three million barrels a day of Russian oil from next month.
According to market analysts, the rising energy prices have in recent times prompted cane mills in top producer Brazil to divert output away from sugar towards ethanol, a cane-based biofuel, leading to a rise in the price of the commodity.
May raw sugar rose one percent to 18.74 cents per lb, while May white sugar was up 0.8 percent to $526.70 a tonne.
Citing a 18.50-20.50 trading range for sugar, dealers said the sweet commodity has an upside bias, adding that any fall in the sugar price will prompt Brazil’s cane mills to divert output to ethanol.
Meanwhile, reports stated that Russia’s federal anti-monopoly service is conducting “anti-cartel” inspections at major sugar producers due to a sharp increase in sugar prices, in what it termed “unjustified” shortages in some regions.
On the other hand, coffee futures plummeted as May arabica coffee dropped one percent to $2.1545 per lb, but remained some way above the four-month low of $2.1015 hit earlier this week, while May robusta coffee was down 0.5 percent to $2,139 a tonne.
Safras & Mercado, Brazil’s agribusiness consultancy, said the top arabica coffee producing country is expected to produce 61.1 million 60-kg bags of beans in the 2022/23 cropping season, eight percent above the 2021/22 figure, but 12 percent below the record seen in 2020/21.
Cocoa futures also recorded bearish trading as May London cocoa slipped 1.8 percent to £1,712 per tonne, while May New York cocoa was down 2.3 percent to $2,504 a tonne.
According to dealers, there has been moderate buying interest from industry of late, but speculators are reluctant to pile in and push prices higher.
They also observed that the demand for chocolate, for which cocoa is the major ingredient, is still recovering from the COVID-19 pandemic.