Citi Research, the US bank’s market research unit, said in a report that it was raising its 2023 price forecast for raw sugar futures by $0.007 per pound to $0.236 as it expects the physical and sugar trade flows would remain tighter for a longer period of time.
“With El Niño now confirmed and a potentially strong and plausible Niño later in the year (…) major sugar-producing regions in Asia, including India, Thailand, China and Pakistan, could face drier weather and/or warmer than normal, leading to lower crop yields,” the report said.
Citi raised its 2023 cocoa price forecast by 5.2% to $2,830 a tonne, largely due to weather risks, but signaled a market correction could be in the offing soon as funds hold large long positions.
It cut its 2023 price forecast for arabica coffee by 5 cents to $1.85 a pound.
“We have adjusted our supply/demand projection to a smaller deficit of 2.4 million bags for the 2022/23 season compared to 3.5 million bags at the beginning of May, given the stabilization of estimated production and the slight reduction in world consumption. expected,” the bank said.