Sugar, coffee, cocoa slide as new COVID-19 strain sinks markets

LONDON: Sugar, coffee and cocoa slid on Monday as investors sought refuge in the perceived safety of the dollar, unnerved by news of a fast-spreading new coronavirus strain that shut down much of the United Kingdom and disrupted international freight.

The dollar surged versus most currencies, making dollar-priced soft commodities costlier for non US investors.

COFFEE

March arabica coffee was down 2% to $1.2455 per lb at 1258 GMT, having hit a one week low earlier.

Arabica closed last week up 3.6% despite upward revisions during the week to the Brazilian 2020 crop.

Speculators raised their net long position in arabica in the week to Dec. 15 by 4,295 contracts to a total long of 19,469 contracts, data showed.

Dealers said coffee had topped out for now and would struggle to trade higher, with Europe heading into another lockdown.

March robusta coffee fell 0.4% to $1,375 a tonne.

SUGAR

March raw sugar fell 0.3% to 14.39 cents per lb, having hit a one-week high on Friday only to close lower.

Speculators reduced their bullish bet in raw sugar in the week to Dec. 15 by 15,557 contracts, taking their net long position down to 149,148 contracts, CFTC data showed.

Dealers said sugar looks set to drop, though a fall below 14 cents should trigger end-user buying.

Egypt aims to import 400,000-500,000 tonnes of sugar in 2021, the head of the agriculture ministry's sugar crop council told Reuters.

March white sugar fell 0.4% to $396.20 a tonne.

COCOA

March London cocoa slipped 0.1% to 1,647 pounds per tonne, having lost 8% last week.

Sterling fell as much as 2.5% as investors sought refuge in the dollar on news of the fast-spreading new coronavirus strain.

A weaker pound makes sterling priced London cocoa cheaper for non-British investors.

March New York cocoa lost 1.5% to $2,436 a tonne.