Sugar steadies near 13-month lows, arabica coffee slips

LONDON: Sugar futures on ICE steadied on Friday at just above their lowest level in more than 13 months, after a sharp drop a day earlier attracted some light industry buying and speculative short-covering.

SUGAR

July raw sugar rose a marginal 0.21 percent, to 14.26 cents per lb by 1127 GMT, reversing course after dipping to 14.09, the lowest level for the front-month since April 2016.

August white sugar rose $0.60, or 0.14 percent, to $422.70 a tonne, after also falling to its lowest level since April 2016.

Both markets plunged sharply on Thursday, with New York shedding 4.3 percent in its biggest one-day rout since April. Dealers pointed to liquidation by several large funds, coupled with momentum selling, as the chief drivers.

After a rocky start on Friday, prices firmed up on light buying from the industry and low-volume short-covering by speculators, dealers said.

"As prices go down, buyers do tend to get more active," said one dealer. "But you can't get around the fact that we're heading to a surplus. The buyers come forward - but they're only buying what they need."

Fundamental indicators continued to weigh, with growing expectations of a recovery in Indian production fuelling worries about a sizeable surplus emerging in the 2017/18 season.

Recent heavy rains in Brazil, which sent the market rallying last month on worries about short-term crop disruptions, are also likely to benefit output in the longer term, adding further to worries about over-supply.

Ukraine's emergence as a player in the world sugar market, boasting cheap prices and an expanding global reach, could restrict the European Union's ambitions to regain its position as a major exporter after it liberalises its market this year.

COFFEE

July arabica fell 0.15 cents, or 0.12 percent, to $1.2755 per lb, after earlier dipping to $1.2680, its weakest since April 28.

Honduran coffee exports jumped 51.2 percent in May from the same month last season due to an increase in output, the national coffee institute, or IHCAFE, said on Thursday.

Cumulative October-through-May exports totalled 5.02 million 60-kg bags, or 34 percent more than during the same period last year.

July robusta coffee rose $9, or 0.45 percent, to$2,010 a tonne.

COCOA

Cocoa futures were mixed, with July London cocoa unchanged at 1,571 pounds a tonne and July New York cocoa down $5, or 0.25 percent, at $2,019 a tonne.