Raw sugar futures on ICE were lower on Wednesday as a sharp increase in production in top exporter Brazil continued to exert downward pressure on prices.
July raw sugar fell 0.04 cents, or 0.4%, to 10.21 cents per lb by 1341 GMT.
Dealers said the market was pressured by a switch by mills in the key Centre-South region of Brazil to using more cane to make sugar rather than biofuel ethanol than in the same period last season.
"Despite the better performance of oil prices and the gradual recovery of economic activity around the world, sugar prices remain under pressure from the prospects of a strong increase in Brazilian production," analyst Agritel said in a note.
August white sugar was down $1.10, or 0.3%, at $343.10 a tonne.
July arabica coffee fell 1.05 cents, or 1.0%, to $1.0630 per lb.
Dealers said the initial pick-up in demand for home consumption linked to lockdowns across the globe appeared to be beginning to fade while out-of-home sales looked set to remain weak.
Supplies also appear ample with little sign of any disruption to the flow out of top producer Brazil.
Brazil exported 2.99 million 60kg bags of green coffee to overseas clients in April, 1.5% more than in the same month a year ago, industry association Cecafe said.
July robusta coffee fell $14, or 1.2%, to $1,166 a tonne.
Vietnam, the world's top robusta producer, exported 165,799 tonnes, or 2.76 million 60kg bags, of coffee in April, down 2.5% from March, customs data showed on Wednesday.
July New York cocoa was up $28, or 1.2%, at $2,430 a tonne, regaining some ground after falling 2.5% on Tuesday.
Dealers said the market had been underpinned recently by a decline in port arrivals in top producer Ivory Coast and logistical challenges linked to measures to slow the spread of the novel coronavirus.
Weakness in demand, however, remains a bearish factor.
"Despite global recession, origin grinds in April were flat year on year and are plus 3%-4% season to date, but this probably masks second-quarter losses across the European and North American regions and possibly Asia," said Citi analyst Aakash Doshi.
Doshi forecasts a global cocoa surplus of 30,000 tonnes in 2019/20, widening to 150,000 tonnes in 2020/21. July London cocoa rose 27 pounds, or 1.4%, to 1,949 pounds a tonne.
Comments
Comments are closed for this article.