White, or refined, sugar for December delivery on the London-based ICE Futures Europe exchange was $10 up on the week at $428.80 a tonne at close on Nov. 12. The contract is due to expire on Nov. 14.
Arabica coffee gains on ICO deficit forecast
Arabica futures moved higher following a forecast for a global deficit in 2014-2015 by the International Coffee Organization (ICO).
ICE March arabica coffee settled at $1.8875 a pound on Nov. 12, after touching an intra-session high of $1.9080 cents a pound. The midweek settlement was unchanged from the previous day but marked a 2 cents per pound gain on last week’s close at $1.8675.
Analysts said the ICO global deficit outlook – which would be the first in five years – is providing a bit of support for the market.
The global coffee market will see a sizeable deficit of 800,000 60-kg bags during the 2014-2015 crop year after drought and disease ravaged crops in South and Central America, ICO’s executive director, Robério Oliveira Silva said on Nov. 7 in a Thomson Reuters interview at the third annual conference of the Ethiopian Coffee Exporters’ Association being held in Addis Ababa.
The ICO earlier had indicated lower production in 2014-2015 would likely result in a global deficit but had not indicated an estimate of the size of deficit.
In a presentation at the conference, Silva emphasised the importance of increasing coffee production in Africa, which he said represented nearly 20 percent of global supply in 1990 but only accounts for 11 percent today.
“Even in absolute terms, coffee production in Africa this year is estimated at around 16.3 million bags, one hundred thousand bags less than in 1990,” he said, according to the ICO blog on the organization’s website.
Robusta coffee markets remain well-supplied, with the new coffee harvest from top robusta producer , Vietnam, well underway and gathering pace. The country’s harvest typically starts peaking in early December.
January robusta coffee settled $10 up at $2,041 a tonne on the ICE Futures Europe exchange on Nov. 12. This second-position contract had finished last week at $2,019 a tonne.
Cocoa outlook turns increasingly bearish
Cocoa futures remain under pressure as investors exit the market amid the prospects of a bumper main harvest in top growing country Côte d’Ivoire and also in second biggest producer Ghana. Traders report large volumes of beans have been arriving at Côte d’Ivoire’s ports since the main 2014-2015 harvest began on Oct. 1.
March cocoa futures on ICE Futures U.S. initially edged up to settle as high as $2,919 a tonne on Nov. 11, up $25 on the day and a $36 gain on last week’s close. However, at midweek, the second-position contract was trading close to last week’s 5⅟2-month low of $2,853. ICE March cocoa on Nov. 12 dipped to a intra-session low of $2,855 a tonne before settling at $2,867, down $52 a tonne on the day.
London March cocoa futures settled at £1,885 a tonne at midweek, down £34 on the day and £17 on last week’s finish at £1,902.
ICE cotton futures continued to struggle this week, with the benchmark March contract falling to a five-year low of 60.08 cents a pound on Nov. 12 before clawing back to close at 60.34 cents, down 1.19 cents on the day and 2.27 cents down on the week to date. The spot December contract settled 1.36 cents down at 61.94 cents.
As reported here previously, China’s decision to scrap its cotton stockpiling program in favour of direct subsidies to farmers has been weighing heavily on global cotton markets in recent months.
The scheme made it cheaper for Chinese companies to import the fiber rather than buy home-grown product and over the three years it was in place provided significant support for world cotton markets and prices.
While care has been taken to ensure that the information contained in this report is accurate, it is supplied without guarantee. The author can accept no responsibility for any errors or any consequence arising from the information provided.
