LONDON: Raw sugar futures fell to a 2-1/2-year low on Wednesday as broader economic concerns and the weakness of top producer Brazil's currency added to an already bearish mood in a market struggling with excess supplies.
SUGAR
May raw sugar was down 0.27 cent, or 2.15 percent, at 12.27 cents per lb at 1403 GMT after touching 12.20 cents, the weakest for the front month since September 2015.
Dealers said prices were weighed down partly by a firmer dollar and macroeconomic concerns, with global shares toppling again.
A fall in Brazil's real to its lowest against the dollar since December 2017 could also trigger more selling in the world's top producer by making prices more attractive in local currency terms.
"The Brazilian real price activity is adding to the sugar bull tragedy," said Tom Kujawa, co-head of the softs department at Sucden Financial, adding sugar prices would likely fall further in coming sessions.
Commodity analysts at Green Pool on Wednesday raised their forecasts for anticipated global sugar surpluses in the 2017/18 and 2018/19 seasons, with supplies boosted by strong production in India and Thailand.
The analysts said the two surplus seasons would raise stocks-to-use to 53.2 percent by the end of 2018/19.
"That will be a record high STU, in turn generating a pessimistic market outlook," Green Pool said.
Dealers noted a rise in discounts for nearby delivery added to the bearish mood. October 2018 traded at a huge discount of 1.25 cents to March 2019.
"The deepening discounts in the futures spreads are very bearish," Commonwealth Bank of Australia analyst Tobin Gorey said in a market note.
May white sugar was down $4.00, or 1.1 percent, at $351.90 a tonne.
COFFEE
May robusta coffee was up $1, or 0.1 percent, at $1,736 a tonne.
Dealers said industry buying and fund short-covering had helped the market rebound from Friday's low of $1,671, the weakest for the second month since June 2016.
May arabica coffee was down 0.70 cent, or 0.6 percent, at $1.1825 per lb.
COCOA
May London cocoa was up 1 pound, or 0.1 percent, at 1,771 pounds a tonne.
May New York cocoa rose $5, or 0.2 percent, to $2,559 a tonne.
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