Sugar hits 11-year high amid supply crunch

By Onome Amuge

White sugar futures surged to an 11-year peak on  the Intercontinental Exchange (ICE),  as supply concerns persisted, underpinned by reports of recent rains in top producer Brazil.

August white sugar  was up 2.5 per cent to $712.30 a tonne on Thursday, after setting an 11-year high of $721.00 in an earlier session. May raw sugar climbed1.7% to 26.97 cents per lb.

According to dealers, lower than expected output in India, Thailand and China had tightened supplies while the harvest in centre-south Brazil had been slowed by rains.

A survey by S&P Global Commodity Insights showed expectations for sugar production in the first half of April at 560,000 tonnes, lower than mills had planned because of the rains in Brazil.

Market dealers also noted that a delivery of 750,000 to one million tonnes was expected against the May raws contract that expires on Friday.

Meanwhile, coffee prices traded lower on Thursday but maintained high valuations due to supply tightness.

July robusta coffee was down one per cent to $2,388 a tonne after peaking a day earlier at $2,489, its highest in nearly 12 years.

 July arabica coffee  shed 1.85 per cent  to $1.8805 per pound.

Dealers  noted that  the market remained supported by tight supplies, with farmers in top robusta producer Vietnam having little left to sell. They also observed that robusta harvest in Brazil is also just beginning to gather pace.

According to market data,prices for robusta coffee, cheaper historically than the milder arabica beans, reached their highest in 12 years this week as roasters used more of a limited flow from the largest producers.