LONDON: Raw sugar prices edged up on Tuesday after hitting a one-week low as oil prices slumped on fears over surging coronavirus cases, while arabica coffee recovered some of its sharp losses from the previous day.
Falling oil prices encourage cane mills in Brazil to ramp up sugar output at the expense of cane-based ethanol fuel.
October raw sugar inched up 0.02 cents, or 0.2%, to 11.95 cents per lb at 1439 GMT, having hit a low of 11.78.
Dealers said raws should remain range-bound near term, buffeted by the economic downturn but underpinned by dry weather in Brazil and a dearth of selling from Brazilian farmers who have already hedged much of their output.
Speculators raised a net long position in ICE raw sugar by 5,839 contracts to 45,920 contracts in the week to June 30, CFTC data showed.
August white sugar fell $1.30, or 0.4%, to $347 a tonne.
September arabica coffee rose 1.4 cents, or 1.4%, to 99.50 cents per lb, having lost nearly 5% on Monday on receding worries over adverse weather in Brazil.
A dealer said traders he polled expect another 7 to 10 cent price drop going forward as the coronavirus pandemic hurts demand, while Brazil harvests a record crop.
Speculators reduced their short bet in ICE arabica coffee by 2,455 contracts to 25,214 contracts in the week to June 30.
September robusta coffee fell $12, or 1%, to $1,187 a tonne.
September London cocoa fell 17 pounds, or 1.1%, to 1,575 pounds per tonne, after touching a 1-1/2 year low on Monday.
Rainfall was above average over most of Ivory Coast's cocoa regions last week, increasing the chances of a strong start to the next main crop in October.
September New York cocoa fell $19, or 0.9%, to $2,133 a tonne, having hit its lowest since March 2019 at $2,130.
Speculators slightly increased their net short position in New York cocoa by 794 contracts to 15,022 contracts in the week to June 30.
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