Sugar, coffee, cocoa slide as wider financial markets under pressure

LONDON: Raw sugar futures on ICE fell to the lowest level in two months on Monday as the wider financial markets remained under pressure from a hawkish US Federal Reserve, while arabica coffee and New York cocoa hit their lowest since May.

SUGAR

July raw sugar fell 1.3% to 16.21 cents per lb at 1126 GMT, after dipping to its weakest since mid-April at 16.21.

Funds are continuing to unwind their long position in sugar, exacerbating the sell-off, dealers said.

"The drop in sugar-ethanol parity means the market's anchor has been moved lower (and) the July-October spread has dropped into a new, more heavily discounted, territory," Commonwealth Bank of Australia said in a note.

Improving crop outlooks in India and Thailand following favourable rains, and the strong pace of production in Brazil during the second half of May, have contributed to the recent weakness in prices.

August white sugar fell 1.1% to $418.70 a tonne.

COFFEE

September arabica coffee fell 1.8% to $1.4920 per lb, having touched its weakest since mid-May at $1.4910.

The return of rains in top producer Brazil has improved the outlook for next year's harvest, while coffee is also now flowing out of Colombia after recent disruptions caused by anti-government protests.

September robusta coffee fell 1.6% to $1,592 a tonne.

COCOA

September New York cocoa was little changed at $2,372 a tonne, having hit its lowest since early May at $2,365.

The cocoa market continues to struggle with excess supplies even as demand is improving with economies easing COVID-19 restrictions.

Cocoa arrivals at ports in top grower Ivory Coast reached 2.057 million tonnes by June 20 since the Oct. 1 start of the season, exporters estimated, up 6.3% from the same period last season.

September London cocoa dipped 0.1% to 1,627 pounds per tonne.