BY ONOME AMUGE
Raw sugar futures retreated on the Intercontinental Exchange (ICE) after hitting five-month highs in the previous session, with market dealers noting that expected price slump of ethanol in top producer Brazil should cap prices for the sweet commodity.
They also projected that lower ethanol prices will prompt cane mills in the South American country to produce more sugar and less of the biofuel, triggering a downward movement in sugar prices.
May raw sugar slipped 0.04 cents or 0.2 percent at 20.06 cents per lb, after climbing to a five-month peak of 20.51 cents the previous day, while May white sugar lost $7.40 or 1.3 percent at $568.80 a tonne.
According to commodity analysts at Commonwealth Bank of Australia, Brazil’s spot ethanol prices will likely fall from their current lofty levels as Centre-South Brazil production ramps up. They added that ethanol prices will act as a fundamental anchor for the sugarcane market.
Meanwhile, sugarcane growing regions in India, the world’s second largest producer of the sweetener, are expected to get normal to above normal seasonal rainfall this year, an indication of a bumper harvest which heightens the possibility of a decline in prices of sugar in the long term, analysts said.
On the other hand, cocoa futures recorded bullish valuations as July London cocoa gained £8 or 0.4 percent to £1,803 per tonne, while July New York cocoa was $9 or 0.3 percent higher at $2,636 a tonne.
Cocoa production in Ghana, the second largest producer, is expected to drop by at least 31 percent in 2021/22, due to extremely harsh growing conditions, industry sources said.
On supply levels, data from the exporters’ association, GEPEX, showed that Ivory Coast’s cocoa grind rose 6.1 percent year-on-year in March to 52,000 tonnes.
