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Jun 01, 2020 PRINT EDITION
Markets

Raw sugar futures ease

Raw sugar futures on ICE were slightly lower on Monday, pressured by growing sentiment that the global market may swing into surplus in the 2020/21 season while arabica coffee prices recoverd some ground after steep losses late last week.

March 31, 2020

Raw sugar futures on ICE were slightly lower on Monday, pressured by growing sentiment that the global market may swing into surplus in the 2020/21 season while arabica coffee prices recoverd some ground after steep losses late last week.
May raw sugar slipped by 0.06 cents, or 0.5%, to 11.04 cents per lb at 1311 GMT. Dealers said the market was pressured partly by the prospect of more output in centre-south Brazil as the slump in energy prices prompts mills to use more cane to produce the sweetener rather than biofuel ethanol.
"At current values, ethanol sales in Brazil are paying the equivalent of 55 points less than what mills would get selling sugar to export markets, considering NY (raw sugar) futures prices," said Arnaldo Correa, managing director at Brazilian sugar industry adviser Archer Consulting.
"If Brazil's center-south produces the amount of sugar we are expecting it to produce, due to falling demand and prices for ethanol, it is possible that we would not see that expected global sugar supply deficit," he added.
Australia-based analysts Green Pool on Friday switched its forecast for the 2020/21 season from a global deficit to a small surplus. May white sugar rose $8.30, or 2.4%, to $359 a tonne, boosted partly by concerns that a 21-day coronavirus lockdown in India is disrupting white sugar exports.
"Most ports (in India) are shut down, either officially or because migrant port workers have simply voted with their feet. A number of export sales have been cancelled because of Force Majeure. And some destinations are reported to be turning ships away," broker Marex Spectron said in a note.
May arabica coffee rose 1.2 cents, or 1%, to $1.1705 per lb as the market showed signs of resuming its advance after a sharp setback late last week. The market has been supported partly by stockpiling in some of the largest consuming countries.
There has also been concern about coronavirus-related operational hurdles in top producer Brazil. May robusta coffee fell $6, or 0.5%, to $1,203 a tonne. May London cocoa was down 6 pounds, or 0.3%, at 1,779 pounds a tonne.
May New York cocoa rose $18, or 0.8%, to $2,275 a tonne. US customs authorities have asked cocoa traders to report where and when they encounter child labour in their supply chains in top grower Ivory Coast, three industry sources said, after calls from American lawmakers to ban some imports.

Copyright Reuters, 2020