“As far as the ICCO’s current projections are concerned, there is no immediate cause for concern about the supply of cocoa for the next five years, ” the ICCO statement said. “There has been a tight relationship between supply and demand over the years and, while our projections show that supply deficits are likely to occur during the next several years, stocks of cocoa beans should cushion this development before production growth accelerates.”

Raw sugar dips to 2⅟2-month

Raw sugar futures traded lower this week, touching  a 2⅟2-month low on Dec. 3 amid plunging crude oil prices, a soft Brazilian real against the U.S. dollar and plentiful nearby supplies .

Raw sugar for March delivery on ICE Futures U.S. dipped to  15.07 cents a pound on Dec. 3, its weakest  since late September, before settling 0.15 cents down on the day at 15.09 cents. The following day ICE March sugar was able to trim losses to finish 0.12 cents up at 15.21 cents a pound.

March white, or refined, sugar futures in London were also lower at midweek, finishing at $390.30 a tonne, $4.10 down on the day and  $16.60 lower since last week’s close at $406.90 a tonne.

Weak crude oil prices  are eroding the competitiveness and thus the incentive to divert cane to ethanol bio production in top grower Brazil, thus making it more attractive for the country’s cane millers to produce sugar rather than ethanol. However,  with this season’s cane crush in the country’s main cane-producing region, the Center-South,  almost finished, plummeting crude prices will have little impact on this season’s sugar production in Brazil, analysts say.

However, as the global supply/demand balance in sugar markets looks set to shift towards the first deficit in five seasons in 2015, ICE sugar futures are expected to move higher.

Another week of decline on oil markets

Crude oil prices continue to tumble with Brent and the U.S. benchmark West Texas Intermediate (WTI) now trading at their weakest levels in more than five years. Last week, crude prices nose-dived after the Organization of Petroleum Exporting Countries (OPEC) on Nov. 27 decided to keep its collective production target unchanged at 30 million barrels a day, despite a global oversupply of crude and plummeting prices.

Late this week, reports of cuts to official monthly selling prices by Saudi Arabia was taken as a further sign that the producer, widely speculated to be the main driver  behind keeping  the OPEC output target unchanged, is pushing to maintain its market share.

Brent for March delivery on the London-based ICE Futures Europe exchange plunged to a low of 68.81 a barrel on Dec. 4 before trimming losses to finish at 69.64. This marks a fall of close to 14 percent in value in less than two weeks from $80.36 a barrel at settlement on Nov. 21.

WTI for March on the New York Mercantile exchange (Nymex) hit a low of $66.10 a barrel on Dec. 4 before settling at $66.81, a 13 percent drop since Nov. 21.

Crude oil prices have lost around 40 percent of their value since June.

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.