Raw sugar futures saw a rise on Wednesday, with prices increasing by 0.19 cents, or 1%, to 18.86 cents per lb. The price increase was largely attributed to concerns over dry weather in Brazil, which has affected sugar production, and a weaker production outlook in India and Thailand.
Indian Export Concerns
Despite India having a quota of one million tons of sugar to help mills export surplus stocks, there were reports that Indian mills had yet to fulfill their export obligations. Mills have already signed contracts to export 600,000 metric tons of sugar for the 2024/25 marketing year ending in September. However, they have been hesitant to sign additional export contracts due to rising local sugar prices.
Brazilian Sugar Outlook
The outlook for Brazil’s sugar production remains a focal point. StoneX has forecasted 41.7 million tons of sugar production from Brazil’s Centre-South region for the 2025/26 marketing year, which aligns closely with the consensus of 41.6 million tons from a Reuters poll. Datagro has slightly higher expectations at 42.35 million tons.
In the white sugar market, prices rose by 1.7%, reaching $533.20 per metric ton, reflecting the broader bullish sentiment in the sugar market.
Cocoa Prices Edge Higher
Cocoa prices experienced a modest increase, with New York cocoa rising by $53, or 0.6%, to $8,355 per ton. The market, however, has lacked a clear trend in recent days, though it has seen support whenever prices dip below $8,000.
Ivory Coast Outlook
An improving crop outlook in Ivory Coast, the world’s largest cocoa producer, has helped limit any significant rebound in prices after a sharp decline last month. London cocoa prices also increased by 1.3%, settling at 6,489 pounds per ton.
Coffee Prices Weaken Amid Demand Concerns
In contrast to sugar and cocoa, coffee futures saw a decline. Arabica coffee fell 7 cents, or 1.8%, to $3.8675 per lb, pressured by concerns over demand after the sharp price rise last year.
Brazil’s Price Increases
In Brazil, the second-largest consumer of coffee globally, prices for roast ground coffee have risen by 68% since the beginning of 2024, according to Brazil’s statistics agency IBGE. This increase in prices is believed to be eroding demand for the beverage, contributing to the overall negative sentiment in the coffee market.
Robusta Coffee Also Declines
Similarly, Robusta coffee saw a decrease, falling by 0.8%, or $44, to $5,508 per ton, continuing the downward trend seen in the broader coffee market.
Conclusion
In summary, while raw sugar has seen support from weather-related concerns in Brazil and production issues in India and Thailand, coffee futures have weakened due to demand concerns, especially in Brazil, where consumer prices are rising sharply. Cocoa prices have found some support from favorable weather in the Ivory Coast, but overall market sentiment remains mixed as traders await further developments.
Related topics:
