Raw sugar gains on signs of tightening market, coffee down

NEW YORK/LONDON: Raw sugar futures on ICE closed up on Tuesday, underpinned by concerns over supply in Thailand, the world's second-largest sugar exporter behind Brazil, and by signs that demand in Asia is recovering.

Coffee and cocoa futures closed down.

SUGAR

October raw sugar settled up 0.19 cent, or 1.5%, at 12.74 cents per lb, after hitting its highest price since March 6 on Friday, at 13 cents.

Ongoing worries over drought in Thailand and signs of improved demand in Asia underpinned sugar.

Thailand is expected to produce slightly less cane in the coming 2020/21 season after decade-low output this season, a Thai cane and sugar agency said.

Dealers said that with the Brazilian real weakening of late, sugar could struggle to test 13 cents again in the short term, though it had good support at 12.5 cents.

A weak real boosts exports from Brazil by raising the value of dollar-priced sugar in local currency terms.

October white sugar settled up $1.30, or 0.4%, at $371.90 a tonne.

COFFEE

December arabica coffee settled down 1.7 cents, or 1.5%, at $1.136 per lb, sliding for a fourth consecutive session since touching a 4-1/2-month peak last Wednesday.

Coffee has also come under pressure from a weak real and a bumper harvest in top producer Brazil, though it remains underpinned by steep falls in exchange-certified stocks.

"Reports showed high sales volumes from Brazil in the last two weeks, with very good prices and weakening differentials," Rabobank said in a note, adding that arabica could face downward pressure if the dollar continues to strengthen.

November robusta coffee settled down $20, or 1.5%, at $1,337 a tonne.

COCOA

December New York cocoa settled down $40, or 1.6%, to $2,448 a tonne.

December London cocoa settled down 26 pounds, or 1.5%, to 1,686 pounds per tonne.

"We are neutral on cocoa prices in the short term, following the sharp drop recorded in recent months," Fitch Solutions said in a note.