On March 12, 2023, raw sugar futures experienced a notable uptick, driven by dry conditions in Brazil and declining production forecasts from both India and Thailand. In contrast, coffee prices slipped, signaling changing market dynamics. Let’s explore the latest trends in the sugar, cocoa, and coffee markets.

Raw Sugar Futures Climb Amid Production Concerns

Raw sugar futures closed at 18.86 cents per pound, marking a rise of 0.19 cents or 1%. Analysts observed a lack of new export sales from India, which still has a quota of one million tons to fulfill in order to assist local mills with surplus inventory.

• Indian mills currently hold contracts to export 600,000 metric tons of sugar for the 2024/25 marketing year, which concludes in September.
• However, these mills are hesitant to enter new export agreements due to increasing domestic prices.

In Brazil, StoneX projected that sugar production in the Centre-South region will reach 41.7 million tons for the 2025/26 season. This estimate aligns closely with a recent Reuters poll predicting 41.6 million tons, while Datagro is slightly more optimistic, estimating 42.35 million tons.

Cocoa Market Shows Mixed Signals

Turning to cocoa, prices in New York rose by $53 or 0.6%, settling at $8,355 per ton. Market analysts noted that the cocoa sector has lacked a definitive trend in recent days, with support appearing whenever prices dip below $8,000.

• The outlook for this year’s crop in the leading producer, Ivory Coast, has improved, which has curbed potential price rebounds after a significant drop last month.
• In London, cocoa prices also saw a rise, climbing 1.3% to 6,489 pounds per ton.

Coffee Prices Decline Amid Demand Concerns

In the coffee sector, Arabica coffee futures fell by 7 cents, or 1.8%, concluding at $3.8675 per pound. Industry experts pointed out that the market is currently grappling with concerns that last year’s price surge may be diminishing demand.

• According to Brazil’s statistics agency, IBGE, prices for roast ground coffee in grocery stores have skyrocketed by 68% since the beginning of 2024, impacting consumer behavior in the world’s second-largest coffee market.
• Meanwhile, Robusta coffee prices decreased by 0.8%, reaching $5,508 per ton.

The fluctuations in these commodities underscore the intricate balance between supply and demand dynamics in the global market. With weather conditions, production estimates, and consumer trends all playing pivotal roles, stakeholders will need to stay vigilant as they navigate these changing landscapes.