On March 13, 2023, raw sugar futures rose 2.1%, driven by concerns over Brazil’s weather and India’s reduced production forecast. India’s sugar output is expected to decline by 2.94%, raising doubts about meeting export quotas. Cocoa prices fell amid contract expirations, while robusta coffee experienced a slight gain despite farmers holding back stock due to price expectations.
On March 13, 2023, raw sugar futures saw a notable increase due to adverse weather in Brazil and a decline in India’s production forecast. Raw sugar prices rose by 0.39 cents, or 2.1%, ending at 19.25 cents per pound, marking a 6% increase over the past week. Rabobank highlighted that concerns over rainfall in Brazil and reduced sugar production projections in India fueled this bullish trend.
India’s projected sugar production for the current season, which concludes in September, is now estimated at 26.4 million metric tons, down from 27.2 million tons, according to the Indian Sugar Mills Association. There is speculation that India may not fulfill its one million ton export quota, with mills having contracted 600,000 tons for the 2024/25 marketing year, yet they hesitate to enter additional agreements due to rising domestic prices. Additionally, white sugar prices increased by 1%, reaching $538.70 per metric ton.
In cocoa markets, prices saw a decline, with London cocoa falling by 148 pounds, or 2.3%, to settle at 6,341 pounds per ton. Dealers noted a desire to take delivery against the expiring March contract, priced at a premium of around 108 pounds over May. The March cocoa open interest stood at 2,821 lots, approximately equating to 28,210 tons. Meanwhile, New York cocoa dropped by 2.2%, ending at $8,172 per ton.
Robusta coffee futures increased by $20, or 0.4%, concluded at $5,528 per ton, bolstered by slow farmer sales in Vietnam, the leading producer. A trader noted that Vietnamese farmers may retain 30% to 40% of their stocks in anticipation of higher prices. Conversely, Arabica coffee prices fell by 0.3%, settling at $3.857 per pound. Moreover, Brazil’s coffee exports decreased by 12% in February due to limited bean availability, as reported by exporters group Cecafe.
In conclusion, the recent developments in the raw sugar market reflect significant influences from weather patterns in Brazil and a downgraded production forecast in India. Cocoa prices, on the other hand, faced losses as dealers prepared for contract expirations, while coffee markets exhibited a mixed performance with robusta experiencing gains amidst limited supply. Overall, the commodity markets are navigating fluctuating insights amid production concerns and changing demand dynamics.
Original Source: www.livemint.com
