LONDON: Raw sugar futures fell to the lowest level in almost seven weeks on Wednesday while arabica coffee dipped to a three-week low as a strong dollar contributed to weakness in both markets.
SUGAR
October raw sugar was off 0.07 of a cent, or 0.53 percent, at 13.06 cents per lb at 1348 GMT, the weakest for the front month since June 29.
Dealers said the recent decline had been driven partly by global economic concerns and a strong dollar.
They also noted supplies remain ample with nearby positions in both raw and white sugar trading at substantial discounts to further forward contracts.
Brazilian sugar and ethanol maker Sao Martinho on Tuesday said it was delaying sugar hedging due to current low prices for the sweetener.
"They (producers) are shouting from the rooftops that enough is enough," one dealer said, adding it was now more remunerative for Brazilian producers to use cane to produce ethanol rather than sugar.
October white sugar was unchanged at $363.10 per tonne.
COFFEE
December arabica coffee was 1.7 cents, or 1.25 percent, lower at $1.3385 per lb after dipping to a low of $1.3360, the weakest for the second position since July 26.
Rains in top producer Brazil have contributed to the recent decline in prices.
"The 2018/19 crop in particular is likely to profit from the rain; it is in any case another high-yield year in the two-year cycle," Commerzbank said in a market note.
November robusta coffee was down $6, or 0.29 percent, to $2,047 per tonne after slumping to a fresh seven-week low of $2,042.
COCOA
December New York cocoa was $19 or 1.02 percent lower at $1,846 a tonne after touching $1,843, the weakest for the second position since July 13.
Dealers said a large global surplus in the current 2016/17 season was keeping the market on the defensive.
They noted that another large crop in West Africa was possible in the upcoming 2017/18 season although more sunshine is needed in some areas.
"It is not only that cumulative shipments in Ivory Coast - the largest growing country - have been a good quarter higher since the season began in October than in the same period last year; the outlook for the next main crop is also positive thanks to the favourable weather," Commerzbank said.
December London cocoa was down 14 pounds, or 0.94 percent, at 1,470 pounds a tonne.
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