Sugar prices drift lower; focus on March whites expiry

LONDON: Sugar futures on ICE were slightly lower on Friday as traders focused on the expiry of the March whites contract while arabica coffee prices were consolidating just below the previous session's 10-year peak.

Sugar

March raw sugar fell 0.3% to 18.25 cents per lb by 1137 GMT and was on track for a marginal weekly gain of 0.1%.

Dealers said the market remained underpinned by the recent strength of energy prices, which increases the incentive to use cane to produce biofuel ethanol rather than sugar, particularly in top exporter Brazil.

"While elevated crude oil prices will support sugar prices, we think that they will ease back later this year and put downward pressure on sugar prices throughout the remainder of 2022," Fitch Solutions said in a note.

May white sugar fell 0.3% to $489.30 per tonne.

Dealers said a delivery of about 450,000 to 500,000 tonnes was expected against the March contract, which expires on Friday. That is a similar tonnage to the March 2021 contract when 511,750 tonnes were tendered.

Arabica coffee prices climb as exchange stocks fall

Coffee

May arabica coffee edged up by 0.04% to $2.5550 per lb, hovering just below a 10-year peak of $2.6045 set on Thursday.

The market was on a track for a weekly gain of 5.4%, supported by tight supplies, with exchange stocks close to their lowest level in 20 years.

May robusta coffee rose 0.75% to $2,280 a tonne after setting a four-week high of $2,281.

Cocoa

May New York cocoa fell 1.45% to $2,792 a tonne, losing some ground after climbing on Thursday to a two-year high of $2,838.

Dealers said concerns about dry weather in top producer Ivory Coast remained a supportive factor.

May London cocoa was down 1.1% at 1,837 pounds a tonne.