Raw sugar prices edge up as crude oil extends advance

Fawad Maqsood July 31, 2019

LONDON: Raw sugar futures on ICE edged higher on Wednesday, boosted partly by further gains in crude oil prices, while coffee and cocoa prices eased.

SUGAR

* October raw sugar rose 0.05 cents, or 0.4%, to 12.20 cents per lb by 1101 GMT.

* Oil prices rose for a fifth day on Wednesday, supported by a drop in US inventories and investor expectations that the US Federal Reserve will lower borrowing costs for the first time since the financial crisis more than a decade ago.

* Dealers said the strength of energy markets should ensure that mills in Centre-South Brazil seek to use as much cane as possible to make ethanol rather than sugar.

* “The question is just how little sugar can they (mills in Centre-South Brazil) make in practice. Guesses are for a final sugar production figure of around 25.5 (million tonnes), compared to last year’s 26.5 (million tonnes),” Marex Spectron analyst Robin Shaw said in a market note.

* October white sugar was unchanged at $323 a tonne.

COFFEE

* September arabica coffee was down 0.55 cents, or 0.55%, at 98.95 cents per lb.

* Dealers said they were continuing to keep a close watch on forecasts for Brazil coffee areas with the potential for frosts to damage crops at this time of year.

* They noted temperatures were expected to drop in some areas over the coming weekend but there did not appear to be a major threat to crops.

* A frost scare in early July sent arabica prices to 2019 highs but gains were not sustained as crop damage appeared minimal, dealers said.

* September robusta coffee was down $9, or 0.7%, at $1,345 a tonne.

COCOA

* September New York cocoa was down $13, or 0.55%, at $2,365 a tonne.

* Dealers said an improving outlook for the main crop in top grower Ivory Coast was weighing on prices.

* September London cocoa fell 6 pounds, or 0.3%, to 1,841 pounds a tonne.

Copyright Reuters, 2019

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