Sugar futures dip as market focuses on October expiry

Raw sugar futures eased on the Intercontinental Exchange (ICE) as the market focused on the expiry of the October contract

October raw sugar was down 0.4 percent to 18.36 cents per pound, while December white sugar lost 0.02 percent to $529.70 a tonne.

Dealers noted that the market continued to derive support from short-term supply tightness with October trading at a premium of about 0.69 cent higher as seen in March.

They added that deliveries against the contract could total around one million tonnes, significantly higher than around 222,250 tonnes against last year’s October contract but well below the record 2.58 million tendered in 2020.

Also lending support to supply is the report that mills in Brazil, the world’s largest exporter, were looking to use as much cane as possible to make sugar rather than biofuel ethanol, as sugar was currently more profitable.

Meanwhile, cocoa futures gained for the week as December London cocoa rose 0.8 percent to 1,956 pounds a tonne, while December New York cocoa climbed 1.3 percent to $2,358 a tonne.

Dealers said the weakness of sterling had contributed to the recent strength of prices for the London-based contract.

The soft commodity was also buoyed by reports that Ivory Coast has raised the fixed farmgate price paid to cocoa farmers by over 9 percent to 900 CFA francs or $1.33 per kilogramme from 825 CFA francs for the main crop of the 2022/2023 season as announced by Tiemoko Meyliet Kone, the country’s vice president.

On the contrary, coffee prices slipped but the market continued to be underpinned by declining exchange stocks as ICE-certified arabica stocks on Sept. 29 stood at 435,409 bags, the lowest in 23 years.

December arabica coffee shed 0.6 percent to $2.2425 per pound, while November robusta coffee declined 0.7 percent to $2,167 a tonne.