Sugar plunges as traders focus on expiring March contract

SUGAR FUTURES TRAD ED LOWER ON THE INTERCONTINENTAL EXCHANGE (ICE) as traders concentrated on the expiry of the March whites contract.

March raw sugar slipped 0.3 percent at 18.25 cents per lb, while May white sugar shed 0.3 percent at $489.30 per tonne.

For May white sugar, dealers said a delivery of about 450,000 to 500,000 tonnes was expected against the March contract, which expires in less than a week. The figure was also observed to be a similar tonnage to the March 2021 contract when 511,750 tonnes were tendered.

Dealers said the sugar market remained underpinned by the recent strength of energy prices, which increases the incentive to use cane to produce biofuel ethanol rather than sugar, particularly in top exporter Brazil.

In its projection, Fitch Solutions predicted that while elevated crude oil prices will support sugar prices, they are likely to ease back and put downward pressure on sugar prices throughout the remainder of 2022.

Meanwhile, arabica futures maintained their upward trend as May arabica coffee rose 0.04 percent to $2.5550 per lb, hovering just below a 10-year peak of $2.6045 set the previous day.

May robusta coffee was 0.75 percent higher to $2,280 a tonne, after setting a four-week high of $2,281.

Dealers noted that the coffee market’s surge was supported by tight supplies, with exchange stocks close to their lowest level in 20 years.

The week ended on a negative note for cocoa as May New York cocoa dropped 1.45 percent at $2,792 a tonne, losing some ground after climbing to a two-year high of $2,838 a tonne a day prior.

May London cocoa was also bearish as it slipped 1.1 percent at £1,837 a tonne.

Dealers said concerns about dry weather in top producer Ivory Coast and other cocoa producing areas in the West African region remained a supportive factor.