Robusta coffee slips as Brazil reverses decision to import

Robusta coffee futures on ICE fell on Wednesday as Brazil backtracked on plans to allow imports for the first time, while raw sugar turned lower after failing to reach the psychological resistance level of 21 cents per lb. Cocoa prices were little changed as they hovered above last week's multi-year lows.
Robusta coffee slipped, with the May contract ending down $28, or 1.3 percent, at $2,161 per tonne, after falling $46 in the first two minutes of trade. The weakness came after Brazil's President Michel Temer ordered a suspension of the authorization of robusta coffee imports late on Tuesday, after supplies were hurt by two years of drought.
"For me, for anything like this to go through, it's got to be a desperate situation," one dealer said, noting a recent fall in internal prices suggested this was not the case. "It shows you there's coffee there. They just need a bit of pressure to sell it." Local robusta producers have opposed the move, maintaining there is enough domestic supply to meet demand. Arabica coffee turned lower, hugging the 200-day moving average after tapping a three-week high of $1.533 per lb.
May arabica settled down 0.95 cent, or 0.6 percent, at $1.509 per lb. May raw sugar settled down 0.06 cent, or 0.3 percent, at 20.68 cents per lb, after climbing to 20.94. Dealers said technical sell signals supported earlier gains but prices failed to hold above the 200-day moving average and then moved below it. The International Sugar Organisation on Tuesday trimmed its sugar deficit forecast for 2016/17 but also noted dwindling global stocks will help support prices after the market comes out of deficit in the 2017/2018 season.
May white sugar settled down 10 cents, or 0.02 percent, at $560.50 per tonne. May New York cocoa settled down $1, or 0.05 percent, at $1,995 per tonne. May London cocoa settled down 5 pounds, or 0.3 percent, at 1,609 pounds per tonne. "Multi-year low prices across international futures are expected to incentivise consumption into Q3 2017" with New York cocoa prices forecast to remain below $2,250 through 2017, said Rabobank in a report. Goldman Sachs said it revised New York cocoa price forecasts down by $400 to $2,000 in three months and $2,200 in 12 months.