News
05.08.2009
White sugar hits record high
White sugar futures hit a record high and raw sugar touched a 3-1/2-year peak for a second day on Tuesday, buoyed by strong Indian demand prospects and concern over slow cane harvesting in top grower Brazil. Coffee and cocoa futures were little changed in moderate volumes, with the upside capped by a firm dollar, dealers said.
London October white sugar closed up $9.30 at $512.20 a tonne on Tuesday, having earlier touched a record high for the front month of $513.00. The market was supported by strong Indian demand prospects and slow cane harvesting in top grower Brazil. December cocoa settled unchanged at 1,837 pounds a tonne. Sterling's rise to a nine-month high against the dollar helped to keep a lid on prices.
September robusta coffee settled up $5 at $1,520 per tonne, buoyed by further gains in ICE arabicas. Raw sugar futures rose to 19.46 cents a lb, a fresh 3-1/2-year high. "India still needs to buy, and the Brazilian crop has not been progressing as well as hoped," one London-based sugar dealer said. "Sugar has a very strong story."
Traders also digested news of a large Egyptian purchase of raw sugar, but it was not immediately clear if the deal was a factor beind the latest rally. Egypt's state-owned Sugar and Integrated Industries Co (SIIC) said on Tuesday it had bought 100,000 tonnes of raw Brazilian sugar in a tender. Volatility in soft commodities prices hinged on gyrations of the dollar, traders said.
"Sugar prices will be a function of what happens with the dollar," said Pierre Sebag of London-based consultancy Sugar K Ltd. "The market fundamentals are positive." Rains in Brazil, the world's biggest sugar exporter, have slowed harvesting in the main centre-south growing region, adding to the bullish pressure, dealers said.
Reuters
