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LONDON — Raw sugar futures on ICE hit their highest in almost six years on Wednesday as continued signs of near-term supply tightness prompted speculators to buy and deterred physical traders from selling.
SUGAR
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* March raw sugar was up 0.6% at $20.70 cents per lb by 1611 GMT after touching the highest level since February 2017 at 20.99 cents.
* Dealers said speculative funds are increasing their long position while the trade is very cautious about selling, leaving little to stop the market from climbing.
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* Fundamentals are increasingly pointing to more production next year, they said, but the market does not seem to believe this will ease the near-term tightness.
* This tightness can be seen in the premium for front-month March futures over May
* Delays to harvests in Thailand, Australia and Central America have helped to tighten supplies while rain has meant some cane in Brazil will not be cut until next season.
* In bearish news, dozens of merchant ships carrying grains and sugar are stuck outside Iranian ports as payments snags disrupt flows of goods into the country.
* March white sugar was flat at $564.30 a tonne, having hit its highest since mid November at $574.
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COFFEE
* March arabica coffee rose 0.7% to $1.6880 per lb.
* The strengthening of Brazil’s real currency against the dollar is underpinning arabica prices.
* World coffee production is forecast to rebound in 2022/23, primarily because of a larger crop in Brazil, the U.S. Department of Agriculture said.
* March robusta coffee rose 0.6% to $1,880 a tonne, having hit its lowest since Dec. 6 on Tuesday at $1,851.
COCOA
* March London cocoa rose 0.9% to 2,006 pounds a tonne after gaining 0.7% on Tuesday.
* March New York cocoa rose 1.4% to $2,531 a tonne, having closed flat on Tuesday. (Reporting by Maytaal Angel Editing by David Goodman, Kirsten Donovan)
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