Raw sugar futures rose on March 13, 2023, influenced by dry weather in Brazil and reduced production forecasts in India. White sugar also saw an increase, while cocoa prices fell. Robusta coffee prices increased slightly due to slow farmer sales in Vietnam, with Arabica experiencing a decline.
On March 13, 2023, raw sugar futures continued their upward trend due to adverse weather conditions in Brazil and concerns regarding reduced sugar output in India. The futures for raw sugar increased by 0.39 cents, or 2.1%, closing at 19.25 cents per pound, marking a rise of approximately 6% over the last week.
Rabobank noted in their report that “Bullish price development reflected continued concerns about rainfall volumes in Brazil and a deterioration in sugar production expectations in India.” According to the Indian Sugar Mills Association, sugar production in India is now projected at 26.4 million metric tons for the current season, significantly down from an earlier estimate of 27.2 million tons.
Traders expressed skepticism regarding India’s ability to fulfill its one million-ton export quota, with local prices increasing, leading exporters to hesitate in signing further contracts. Currently, Indian mills have an agreement to export 600,000 tons of sugar for the 2024/25 marketing year.
In the white sugar market, prices increased by 1% to $538.70 per metric ton. Meanwhile, cocoa futures in London dropped 148 pounds, or 2.3%, settling at 6,341 pounds per ton. There appeared to be interest in taking delivery against the March cocoa contract, which is set to expire soon.
The open interest for March stood at 2,821 lots, equating to 28,210 tons, while New York cocoa futures fell 2.2% to $8,172 per ton. In coffee markets, Robusta coffee saw a modest increase of $20, or 0.4%, closing at $5,528 per ton, driven by diminished farmer sales in Vietnam; one trader noted, “Farmers may still have 30% to 40% of their stocks left. They are hoping for higher prices.” Conversely, Arabica coffee prices retreated by 0.3%, reaching $3.857 per pound, as Brazil reported a 12% decline in coffee exports for February due to lower bean availability.
In summary, raw sugar prices have responded positively to challenging production forecasts in India and dry weather in Brazil. Meanwhile, cocoa markets suffered a drop due to upcoming contract expirations and fluctuating interest levels. In coffee markets, increasing robusta prices were contrasted by declining Arabica values and reduced exports from Brazil, highlighting variances in market dynamics. These developments reflect the complex interplay of supply, demand, and climatic conditions affecting these commodities.
Original Source: www.livemint.com
