NEW YORK: Raw sugar prices on ICE rose on Tuesday as short-covering helped the market recover from last month's near 10p
NEW YORK: Raw sugar prices on ICE rose on Tuesday as short-covering helped the market recover from last month's near 10pc loss, while arabica coffee touched a two-week low.
October raw sugar settled up 0.05 cent, or 0.45 percent, at 11.19 cents per lb.
The contract lost 8.8pc last month in its biggest monthly percentage drop in a little more than a year.
Speculators lifted their net short position in raw sugar on ICE Futures US in the week to Aug. 27 to its highest in nearly three months.
"The Indian government's approval of export incentives continues to weigh heavily on the market," one dealer said, adding the downside looked limited, given the size of the net short.
Brazil, a top sugar producer, exported 1.51 million tonnes of raw sugar in August compared with 1.43 million tonnes a year earlier.
Ethanol exports in August reached their highest since October 2013.
Brazilian cane mills are producing more ethanol at the expense of sugar. Cane is a feedstock for both products.
The International Sugar Organization on Monday forecast a global sugar deficit of 4.76 million tonnes in the 2019/20 season.
October white sugar settled down $0.5, or 0.12 percent, at $304.40 per tonne.
December arabica coffee settled down 1.3 cent, or 1.34 percent, at 95.55 cents per lb. During the session, the contract touched 94.20, the lowest since Aug. 20.
"It is the lower real that is driving it, as the dollar gets stronger," said Rodrigo Costa, director of trading at Comexim USA.
The contract remains pressured by the weak Brazilian real and the market's struggle to absorb excess Brazilian supplies. It lost 6.2pc last month.
Brazil, a top coffee producer, exported 2.98 mln 60-kg bags of coffee in August, compared with 2.26 million bags a year ago..
Brazilian exports are expected to continue to soar as weather in late September and early October is expected to support a large harvest, market participants said.
November robusta coffee settled down $25, or 1.88 percent, at $1,304 per tonne.
December London cocoa settled up 31 pounds, or 1.81 percent, at 1,747 pounds per tonne, edging away from a 3-1/2 month low set on Friday.
Weakness in sterling is supporting London cocoa, making it cheaper for holders of other currencies.
Sterling sank to a three-year low below $1.20 on Tuesday as Prime Minister Boris Johnson's implicit threat to lawmakers to support him on Brexit or face an election sent investors rushing to dump British assets.
December New York cocoa settled up $23, or 1.04 percent, at $2,245 per tonne.
Expectations of a big 2019/20 main crop in top growing region West Africa has been pressuring cocoa, though concerns are now rising of crop disease after heavy rains in Ivory Coast.
The International Cocoa Organization on Friday halved its forecast for the expected global cocoa surplus in the 2018/19 season.