BY ONOME AMUGE
Raw sugar futures gained on the Intercontinental Exchange (ICE) amid reports that India, the second largest producer, is likely to impose a restriction on sugar exports from the current level of 10 million tonnes to 6 million or 7 million tonnes in the upcoming season starting October.
The restriction, according to dealers, is aimed at ensuring ample supplies and keeping a lid on local prices in the Asian country.
There are expectations of tax changes in top producer Brazil, aimed at curbing ethanol price inflation. The changes, analysts opine, could lead mills to use more cane to produce sugar rather than biofuel ethanol.
Dealers are confident sugar would find support near term because despite the uncertainty over the impact of the looming Brazil tax changes, energy prices are expected to ultimately move upward, along with ethanol prices.
Meanwhile, Suedzucker, Europe’s largest sugar producer, increased its full-year guidance. The German company said it expects to pass price increases in raw materials and energy to new customer contracts.
On the other hand, coffee futures stumbled into bearish territory as September arabica coffee lost 1 percent to $2.2940 per lb., while September robusta coffee was down 0.8 percent to $2,087 a tonne.
Though concerns over a weakening real (Brazilian currency) weighed on the soft commodity, dealers said the market remained underpinned by falling ICE-certified stocks which fell below one million bags for the first time since February, just a little above the lowest level in 22 years.
Cocoa futures maintained a bullish trend as September New York cocoa rose 2.3 percent to $2,431 a tonne, extending its rebound from 6-1/2-month low of $2,344 a tonne two days ago.
September London cocoa also traded 2 percent higher to 1,742 pounds per tonne, having hit a three-month low the previous day.
