SOFTS-Raw sugar hits 1-1/2 year low as oil prices plunge

• May raw sugar was down 0.04 cent, or 0.4pc, to 10.01 cents per lb at 1129 GMT, having earlier hit its lowest since September 2018 at 9.96 cents.
• Brazilian cane mills tend to produce more sugar and less ethanol, a cane-based biofuel, when energy prices are weak.
• July robusta coffee fell $13, or 1.1pc, to $1,177 a tonne, having hit its lowest in a month at $1,177.

LONDON: Raw sugar hit 1-1/2 year lows below 10 cents per lb on Wednesday as the impact of coronavirus-related lockdowns again hammered oil prices and tempted Brazilian cane mills to ramp up sugar output at the expense of biofuel ethanol.

Coffee and cocoa also fell.

SUGAR

May raw sugar was down 0.04 cent, or 0.4pc, to 10.01 cents per lb at 1129 GMT, having earlier hit its lowest since September 2018 at 9.96 cents.

Oil fell 4pc towards $28 a barrel, pressured by reports of persistent oversupply and collapsing demand due to global coronavirus-related lockdowns and a lack of coordinated oil purchases for strategic storage.

Brazilian cane mills tend to produce more sugar and less ethanol, a cane-based biofuel, when energy prices are weak.

Brazilian mills in the center-south produced 42pc more sugar in the second half of March versus a year ago, data showed.

"Chatter that Brazil will produce 37 million tonnes of sugar would seem a little premature. However, current prices suggest the market is expecting this," said a dealer.

He noted, however, that while more weakness near term seemed likely, there was also limited interest from investors to sell at current price levels.

India, a top sugar producer, is likely to receive average monsoon rains this year, the state-run weather office said, raising expectations of higher farm output.

In the wider markets, global shares dipped as warnings of the worst global recession since the 1930s overshadowed moves by some countries to ease lockdown restrictions.

May white sugar, which expires later this session, rose $4.80, or 1.4pc, to $350 a tonne, amid some chatter about people keen to receive the sugar given tight physical market supplies.

August white sugar fell $2.5, or 0.8pc, to $328.70.

The shutdown of two of the Philippines' major sugar mills due to coronavirus-containment measures could lead to a domestic shortage and trigger price spikes, the country's farm minister said.

COFFEE

July arabica coffee fell 0.9 cents, or 0.8pc, to $1.1745 per lb.

Arabica is looking for direction, having put in a strong performance in March amid tight physical supplies and consumer stockpiling, but with concerns creeping in that this stockpiling has run its course and that demand is set to slow.

July robusta coffee fell $13, or 1.1pc, to $1,177 a tonne, having hit its lowest in a month at $1,177.

COCOA

July London cocoa was down 8 pounds, or 0.5pc, at 1,759 pounds a tonne.

Cocoa arrivals at ports in top grower Ivory Coast fell 3.4pc to 1.688 million tonnes between Oct. 1 and April 12 versus the year earlier period.

The market is waiting for retailers' data on Easter chocolate sales, a major period for business for confectioners around the world.

July New York cocoa fell $31, or 1.4pc, to $2,257 a tonne.