Raw sugar futures on ICE fell on Monday as fears over the coronavirus outbreak in China hit energy prices and prompted expectations more sugar might be produced at the expense of biofuel ethanol. Arabica coffee dropped to two-month lows.
March raw sugar fell 0.13 cents, or 0.9%, to 14.26 cents per lb at 1528 GMT, retreating further from Thursday's two-year high of 14.90 cents.
Commodities and equities were lower across the board, with crude oil below $60 a barrel as the death toll from the virus rose and fears grew over the potential economic impact. Dealers said sugar prices are likely to drop further in the near term, testing 14 cents, despite concern over a large potential supply deficit this season and possibly next.
Still, with the market having corrected substantially from oversold territory, they expect a test of 15 cents further down the line. Speculators in ICE raw sugar contracts increased their net long position in the week to Jan. 2 by 35,006 contracts to 70,991, industry data showed.
March white sugar fell $6.20, or 1.5% to $395.10 a tonne, having touched a 2-/12 year peak of $411.50 on Thursday. March arabica coffee fell 3.40 cents, or 3.1%, to $1.0675 per lb after touching a two-month low of $1.0670.
Speculators in ICE arabica contracts cut their net long position in the week to Jan. 2 by 2,999 contracts to 13,709, industry data showed. ICE certified arabica stocks have risen by 6% this year, pressuring prices, though dealers expect arabica to find a floor around current levels after losing 22% from December's two-year peak.
March robusta fell $6, or 0.6%, to $1,313 a tonne. March New York cocoa fell $4, or 0.2%, to $2,729 a tonne, having hit a 20-month high of $2,859 set last Wednesday on concern over dry weather in top grower Ivory Coast.
Cocoa arrivals at ports in Ivory Coast reached 1.356 million tonnes between Oct. 1 last year and Jan. 26, exporters estimated, up 0.4% from the previous season. Speculators in ICE cocoa contracts upped their net long position in the week to Jan. 2 by 10,068 contracts to 22,818, industry data showed. March London cocoa fell 1 pound, or 0.1%, to 1,945 pounds a tonne.
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