Asia Softs-Indian cyclone ignored; cocoa awaits grindings data

http://in.reuters.com/article/2013/10/14/softs-physicals-idINL3N0I40QS20131014

October 14, 2013 at 3:55 PM

Thai raw sugar premiums could trade in a wide range this week, shrugging off a deadly cyclone in India, while the cocoa market is waiting for the release of Malaysian third-quarter grindings for clues on demand, dealers said on Monday.

Among other soft commodities, benchmark Tokyo rubber futures may track movements in the yen, and the coffee market could see more offers from top robusta producer Vietnam as its harvest progresses, putting pressure on premiums.

Thai high polarisation raw sugar was offered at premiums of between 50 and 100 points to New York's March contract in thin trade. The premiums, which stood at 70 to 80 points last week, could drop this week due to rallies in New York. Premiums and futures often move in opposite directions.

Cyclone Phailin brought winds of 200 kph (125 mph) and heavy rain to the Indian states of Odisha and Andhra Pradesh on Saturday but the impact on sugar cane was minimal, dealers said.

"Whilst much destruction has been reported from areas in the direct path of Phailin, in terms of sugar cane, Odisha is a very minor cane/sugar producing state. So any damage to Odisha's cane will have minimal impact on 2013/14 production," said Tom McNeill, director at commodities analyst Green Pool.

"There could be a benefit to the very dry conditions in Andhra Pradesh where cane is grown - but it's still early days."

 

India, the world's largest consumer, may export as much as 3 million tonnes of sugar in the next season to reduce excess stocks, but New York futures rose to a seven-month high in October after wet weather hampered harvesting in main producer Brazil.

"The market is very much ignoring, at the present stage, the fact that Asian production looks very very strong if we look at Thailand and India being the key areas," said Luke Mathews, a commodities strategist at Commonwealth Bank of Australia.

"And the market is still looking at an overall surplus in 2013/14, something which we think will ultimately weigh on values."

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