Raw sugar slides, eyes 3 month low; coffee also falls

LONDON: Raw sugar futures on ICE fell 3% on Thursday, heading back towards this week's three month low amid a sell-off in the wider financial markets and bets on growing supplies of the sweetener, while coffee prices also fell.

SUGAR

May raw sugar was down 3% to 15.17 cents per lb at 1317 GMT. The contract slid to 15.05 cents on Tuesday.

Dealers said sugar was set to consolidate in a lower range following the large drop earlier in the week, with a push back to the recent lows seemingly more likely near term than a recovery back to 16 cents.

While Brazil is likely to produce slightly less sugar this season, output should recover in Thailand, India and possibly the European Union, leaving the market in surplus, according to participants at a Sugaronline webinar on Wednesday.

Mills in Brazil's centre-south area, the world's largest sugar producing region, got off to a slow start to the 2021/22 season as cane crushing in the first half of March came in 43% below the volumes seen in the same period a year earlier.

May white sugar fell 2.2% to $440.50 a tonne.

An Ethiopian state buyer has issued an international tender to buy up to 320,000 tonnes of white sugar, European traders said.

COFFEE

May arabica coffee fell 0.3% to $1.2615 per lb.

Concerns about weak demand are weighing on coffee, with COVID-19 lockdowns in major consumers such as Germany and France set to curb out-of-home consumption of mostly arabica coffee beans.

May robusta coffee fell 0.2% to $1,363 a tonne.

COCOA

May New York cocoa rose 1.3% to $2,466 a tonne.

"We maintain our New York cocoa 2021 price average (forecast) at $2,505. The (market) is likely to remain in surplus through 2021/22, and 2021 grindings across the Northern Hemisphere will probably not recover to pre-COVID levels until next year," said Citi in a note.

May London cocoa rose 1.2% to 1,747 pounds per tonne.