London: ICE sugar, coffee and cocoa futures consolidated alongside other financial markets yesterday, supported by moves to resolve the Eurozone debt crisis.
European stocks were flat yesterday, but the euro clung to gains from a two-cent rally after Eurozone policymakers moved to shore up struggling banks to fend off a financial crisis.
Raw sugar futures rose, but analysts said sentiment could turn bearish due to the prospect of big northern hemisphere crops and as tight Brazilian sugar supplies were priced into the market.
"We are now moving away from the Brazilian story, and focusing more on what is happening in other producers such as India, Thailand and Europe," said Kona Haque, soft commodities analyst with Macquarie Bank, in a reference to expectations for big crops outside of top producer Brazil.
Questions emerging
A Macquarie commodities research report, released yesterday, said: "As prices head toward the low 20s cents per pound, questions will start emerging on whether Brazil will switch toward ethanol production [from cane], which is still very tight in the domestic market."
ICE March raw sugar futures traded up 0.18 cent or 0.7 per cent at 24.82 cents a lb at 11.25am GMT.
New York sugar is technically neutral within a range of 24.31-25.49 cents per lb.
An escape will trigger the development of a short-term trend, according to Reuters market analyst Wang Tao.
