Raw sugar prices ease as Brazil currency weakens

LONDON: Raw sugar futures on ICE eased on Thursday, slipping slightly from a recent five-month peak, while arabica coffee and New York cocoa prices also weakened.

SUGAR

October raw sugar was down 0.09 cents, or 0.7%, at 13.15 cents per lb by 1051 GMT. The market climbed to a five-month high of 13.28 cents on Friday.

Dealers said the weakness of Brazil's real currency , which fell to a three-month low against the dollar on Wednesday, was seen as a bearish factor.

"The point being made is that sugar prices in the real are their highest level since 2016, a period of very high sugar prices. And the implication is that this will spur more sugar production in Brazil. We are sceptical that is possible to any material degree," Commonwealth Bank of Australia analyst Tobin Gorey said in a note.

Mills in Brazil can switch some capacity to producing sugar or biofuel ethanol depending on relative profitability.

Gorey said that mills were already producing as much sugar as possible, meaning that little, if any, extra sugar production is likely.

October white sugar fell $0.30, or 0.1%, to $379.40 a tonne.

COFFEE

December arabica coffee was down 0.05 cents, or 0.04%, at $1.1930 per lb, with the weakness of Brazil's real currency providing a bearish influence.

November robusta coffee rose $17, or 1.2%, to $1,401 a tonne.

Coffee trading in Vietnam was sluggish this week owing to low stockpiles, while Indonesian premiums narrowed as a progressing harvest increased supply, traders said on Thursday.

COCOA

December New York cocoa fell $6, or 0.2%, to $2,454 a tonne.

December London cocoa was up 11 pounds, or 0.7%, at 1,683 pounds a tonne, supported by a weakening in sterling against the dollar.