LONDON: Raw sugar futures on ICE rose Tuesday after falling to a three-month low in the previous session due to weak demand in Europe and improved availability of supply in the short term. Arabica coffee and cocoa have now reached lows that have lasted for several months.
SUGAR
May raw sugar was 1.1 percentage points higher at 15.08 cents a pound at 1508 GMT, after falling to a three-month low of 14.84 cents on Monday.
“Despite slightly lower production in Brazil, the projections expect more sugar to be produced globally in 2021/22: there are many signs in India … and the EU and Thailand are expected to improve after the recent poor harvests,” he said Commerzbank in a note.
The bank added that there were also short-term concerns about demand given the ongoing lockdowns in Europe.
According to Cepea / Esalq, a research center at the University of Sao Paulo, ethanol prices in Brazil’s largest consumer market fell sharply last week as coronavirus lockdowns weighed on demand.
Falling ethanol prices tend to lure Brazilian mills into prioritizing sugar production at the expense of cane-based biofuel.
Traders said end users are likely to look for lower prices before buying more sugar after recently stocking up.
In May, white sugar rose 0.2 percentage points to $ 432 per ton.
COFFEE
Mai Arabica coffee fell 3 percentage points to $ 1.2320 a pound after hitting its lowest level since mid-February at $ 1.2265.
Arabica is under pressure from a weak Brazilian real, which hit its lowest level in 20 days on Monday.
In May, Robusta coffee fell 1.7 percentage points to $ 1,353 per tonne.
Coffee exports from Vietnam fell by 17 percentage points to 428,000 tons in the first three months of the year compared to the previous year.
COCOA
May New York cocoa fell 3.7 percentage points to $ 2,347 a ton after hitting its lowest level since mid-November at $ 2,336.
May London cocoa fell 2.1 percentage points to £ 1,697 a ton, after hitting its lowest level since mid-January at £ 1,693.
Above-average rainfall, mixed with sun in most of the cocoa-producing regions of Ivory Coast last week, has raised expectations for a strong April-September mid-harvest, farmers say.
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