Sugar falls, focus on India exports.

LONDON: ICE raw sugar futres fell on Friday, partly on weakness in the cash market driven by a lack of offtake, and cocoa firmed as a strong flow out of West Africa limited upside potential.

ICE arabica coffee futures erased earlier gains and remained within sight of a 13-1/2-year high, supported by robust demand and tight supplies.

In sugar, dealers continued to keep a close watch on developments in India, the world’s number 2 sugar producer after Brazil, where there are concerns that anticipated exports could be delayed due to worries about food inflation.

“With China worried about inflation as well as India now, it seems sugar export policymakers in India have an even more difficult decision,” said Thomas Kujawa of broker Sucden Financial.

“It seems Indian officials will have to be very cautious.”A European broker said, “It seems unlikely that the Indian government will authorise any further exports until the harvest has progressed enough that all reasonable doubt about the outcome has been removed.”

India’s sugar output is expected to rise 12 percent to 11.2 million tonnes until Jan 31 from the start of the current season from Oct 1, a producers’ body said on Friday.

A bullish target at 33.35 cents per lb is unchanged for New York sugar, as an upward wave ‘c’ is poised to push the price up, according to Reuters market analyst Wang Tao.

ICE March raw sugar fell 0.56 cent or 1.8 percent at 31.50 cents a lb at 1305 GMT, well below a 30-year high of 34.77 cents touched on Dec 29.

London March white sugar was down $5.80 or 0.7 percent at $781.60 per tonne in moderate volume of 1,967 lots.ICE markets will be closed on Monday for a US holiday.

Cocoa futures firmed in slim volumes, ignoring the European fourth-quarter 2010 cocoa grind data, which fell 2.4 percent on the year to 342,713 tonnes, in sympathy with expectations. reuters.

Source : dailytimes.com.pk