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Markets Print edition: 2020-04-15

Sugar, coffee and cocoa down

Published Updated

Raw sugar prices fell on Tuesday as oil prices continued to retreat, raising concern that cane mills in Brazil will ramp up sugar output at the expense of ethanol, a cane-based biofuel.

May raw sugar fell 0.01 cent, or 0.1%, to 10.06 cents per lb by 1455 GMT.

Oil prices edged lower with investors apparently unconvinced that record supply cuts could soon balance markets pummelled by the coronavirus pandemic.

"The (sugar) market looks weak and another test of the 10 cent level seems probable," said a dealer.

He said sugar would continue to take its lead near term from oil, where price rise prospects remain dim.

In the wider markets, world stocks gained, offering brief support earlier to sugar, with some countries starting to partly lift coronavirus-related lockdown restrictions.

"Brazil mills will make maximum sugar, (37 million tonnes or more?), so a very large sugar surplus will accumulate... anywhere between 4 and 8 million tonnes," Marex Spectron said in a note.

Brazil plans to announce this week measures to support its ethanol sector.

Egypt's state-owned sugar buyer bought 100,000 tonnes of Brazilian sugar in a tender at $275 per tonne.

May white sugar, which expires on Wednesday, fell $0.20, or 0.1%, to $348.30 a tonne.

May arabica coffee fell 2 cents, or 1.7%, to $1.1775 per lb, having closed up 1% on Monday.

May arabica may retest a resistance at $1.2155 per lb, a break above which could lead to a gain to $1.2370, technical signals indicated.

Arabica has been underpinned by tight supplies and consumer stockpiling at retail outlets, though the International Coffee Organization has said it does not expect this demand uptick to be sustained.

July robusta coffee fell $26 or 2.1%, to $1,192 a tonne.

Vietnam, the world's top robusta producer, exported 169,981 tonnes of coffee in March, down 2.2% from February.

July London cocoa was down 36 pounds, or 2%, at 1,767 pounds a tonne, under pressure from strength in sterling.

The market is waiting for retailers' data on Easter chocolate sales, a major period for business for confectioners around the world.

July New York cocoa rose $18, or 0.8%, to $2,289 a tonne.

Copyright Reuters, 2020

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