Raw sugar slips as crude oil falls on escalating US-China tensions

• Dealers said on balance they expect sugar to edge up as the United States, Asia and Europe start to see some light at the end of the tunnel, but noted risks associated with Brazil.
• A weak real encourages Brazilian exporters to sell dollar-priced sugar by raising its value in local currency terms.
• August white sugar was down $1.60, or 0.4pc, at $374.80 a tonne, having hit its highest since early March.

LONDON: Raw sugar futures on ICE slipped on Wednesday as oil prices fell on escalating US-China tensions over Hong Kong, which offset optimism about the re-opening of the world economy.

Falling energy prices encourage cane mills in Brazil to ramp up sugar output at the expense of cane-based ethanol fuel.

SUGAR

July raw sugar slipped 0.02 cent, or 0.2pc, to 11.03 cents per lb by 1106 GMT.

Dealers said on balance they expect sugar to edge up as the United States, Asia and Europe start to see some light at the end of the tunnel, but noted risks associated with Brazil.

The world's top sugar producer has become one of the centres of the coronavirus pandemic, a move that could further hammer ethanol demand and weaken the Brazilian real.

A weak real encourages Brazilian exporters to sell dollar-priced sugar by raising its value in local currency terms.

Germany's second largest sugar refiner Nordzucker said it hoped to return to profit in its new financial year as easing lockdowns stabilise sugar prices and demand.

August white sugar was down $1.60, or 0.4pc, at $374.80 a tonne, having hit its highest since early March.

COCOA

July New York cocoa was up $7, or 0.3pc, at $2,401 a tonne, extending its rebound from a four-week low set on Friday.

Concerns about weakening demand are weighing on cocoa even as output from top producer Ivory Coast falls.

July London cocoa rose 1 pound, or 0.1pc, to 1,944 pounds a tonne?.

COFFEE

July arabica coffee was flat at $1.0510 per lb, having hit its lowest since mid-February on Friday.

Some traders are worried about weakening Arabica demand just as Brazil is expecting a near-record crop this season.

July robusta coffee was down $6, or 0.5pc, at $1,213 a tonne, having hit its highest since late March on Tuesday.