LONDON: Raw sugar futures on ICE were lower on Monday, dragged down by weak crude oil prices and a firmer dollar, against the backdrop of rising Covid-19 cases in the United States and Europe. March raw sugar was down 0.08 cents, or 0.5%, at 14.64 cents per lb at 1537 GMT. The front month set an eight-month peak of 14.94 cents last week.
Dealers said buying by funds had helped to fuel the recent run-up but their appetite to add to an already huge net long position may be starting to diminish. An announcement on the extent to which India will subsidise exports in the current 2020/21 season was keenly awaited amid concerns that financial problems caused by the Covid-19 pandemic might curb the level of government support.
"We still think that the government will, probably within the next 2 weeks, announce export tonnage of 5-6 million tonnes with an export subsidy considerably below last year's," Marex Spectron analyst Robin Shaw said, adding that a lower subsidy would require world prices to rise to draw exports out of India.
December white sugar was down $1, or 0.25%, at $394.60 a tonne. March New York cocoa was up $19, or 0.8%, at $2,498 a tonne. Cocoa exporters in top grower Ivory Coast are negotiating with the country's regulator to try to reduce a premium they pay for export contracts, citing the Covid-19 pandemic's impact on the sector, industry sources said.
March London cocoa rose by 16 pounds, or 0.9%, to 1,718 pounds a tonne. December arabica coffee rose by 0.45 cents, or 0.4%, to $1.0605 per lb. The front month fell to a low of $1.0320 last week, its lowest since July 22. January robusta coffee fell by $2, or 0.15%, to $1,303 a tonne.
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