Credit Suisse Group AG cut its 3-month and 12-month price forecasts for raw-sugar, arabica coffee and cocoa traded on ICE Futures U.S. in New York.
Sugar will be at 26 cents a pound in three and 12 months, down from previous forecasts of 32 cents and 33 cents respectively, the bank said in a report e-mailed today.
“While Brazilian sugar output is expected to disappoint this season, large crops in India, Thailand, Europe and Russia should keep the market sufficiently supplied,” analysts led by Tobias Merath wrote in the report. “The global sugar market is likely to end the 2011-2012 marketing year with a significant surplus, limiting price upside.”
Arabica coffee will be $2.20 a pound in three months and $2 in 12 months. That compares with August estimates of $2.85 and $2.40, the bank said.
“This year, coffee production is likely to come in fairly high, driven by a solid crop in Brazil,” Merath said. “Colombia’s coffee output is also recovering.”
The three-month cocoa price forecast was reduced to $2,700 a metric ton from $3,000 previously, while the 12-month estimate was cut to $2,400 from $2,800 in August, the bank said.
“Cocoa prices have been overvalued for nearly four years now,” it said. “At current levels, the market still looks expensive, but prices now finally seem to be on the right track for a more reasonable valuation.”