LONDON: Raw sugar futures on ICE fell to a 2-1/2-month low on Thursday, weighed by ample supplies, while arabica coffee regained some ground after the prior session’s steep losses.
Sugar
Raw sugar fell 1.7% to 15.28 cents per lb by 1423 GMT after hitting a 2-1/2-month low of 15.19 cents.
Dealers said a report by Brazil sugar industry group UNICA covering the second half of August showed mills in Center-South Brazil continued to favour using cane to produce sugar rather than ethanol.
“The latest UNICA report again pointed to a record sugar mix for the period, alleviating – for now, at least – earlier concerns that Brazilian sugar mills could alter their product mix due to the strength of domestic ethanol prices relative to international sugar prices,” Rabobank said in a note.
The market has also been weighed by favourable prospects for sugar producers in Asia such as India and Thailand.
“Market sentiment retains its distinctive bearish tone, with speculators accumulating their largest net short position in (raw sugar) contracts since the end of 2019,” Rabobank added.
White sugar LSUc1 was down 0.9% at $454.90 a metric ton.
Coffee
Arabica coffee rose 0.85% to $3.7880 per lb after falling by 8.2% on Wednesday.
Dealers said a wave of fund long liquidation had helped to fuel the sharp fall in prices on Wednesday with the decline gathering momentum as key support levels were breached.
The market remained underpinned, however, by tight supplies in the United States following the imposition of a 50% tariff on shipments from Brazil.
Robusta coffee fell 0.5% to $4,429 a ton.
Cocoa
London cocoa fell 1.1% to 5,035 pounds per ton.
Dealers said the market was subdued with many participants away from their desks attending a cocoa conference in Malta.
New York cocoa was down 1.3 to $7,225 a ton.
American Dollar Exchange Rate