LONDON: Robusta coffee futures slumped to a 15-month low on Wednesday, weakened by fund selling and the harvesting of a potentially record crop in Vietnam while sugar and cocoa edged higher.
COFFEE
January robusta coffee fell $22, or 1.2 percent, at $1,779 a tonne after dipping to a low of $1,778, the weakest for the second position since Aug. 18, 2016.
Dealers said coffee was flowing from top robusta producer Vietnam where the harvest is progressing, while the breach of support at $1,800 confirmed a bearish outlook on price charts and prompted more selling by system funds.
"The Vietnam harvest is now coming in and there are willing sellers and system funds are also in the process of selling," one dealer said.
Earlier this week, Rabobank forecast Vietnam would have a record crop this year of 28.7 million bags, sharply up from the International Coffee Organization's estimate for the prior season of 25.5 million.
March arabica coffee rose by 0.20 cents, or 0.2 percent, to $1.2685 per lb.
SUGAR
March raw sugar was up 0.08 cent or 0.5 percent at 14.96 cents per lb.
Dealers said the market was supported by a switch towards more use of cane to make ethanol rather than sugar in Brazil although a global surplus is still widely expected in the current season as production rises in India, the European Union, Thailand and China.
"There is a risk that the market is overestimating the absorbability of the Brazil ethanol sponge and is ignoring the fact that other producing nations are stepping up output and have also to price," said Nick Penney, senior trader with Sucden Financial in a market note.
March white sugar rose by $2.00, or 0.5 percent, to $388.50 a tonne.
Etihad Food Industries has bought six cargoes, each of 42,000 tonnes, of raw Brazilian sugar from Geneva-based Alvean as it continues to negotiate for a new long-term contract, a senior executive at the Iraqi company said.
COCOA
March New York cocoa was up $8, or 0.4 percent, at $2,118 a tonne with the market slowly regaining some ground after its recent setback.
March London cocoa rose by 6 pounds, or 0.4 percent, to 1,589 pounds a tonne.
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