Arabica coffee prices weaken as Brazil currency slides
- May arabica coffee was down 1.9 cents, or 1.4%, at $1.3390 per lb .
- May London cocoa fell by 9 pounds, or 0.5%, to 1,787 pounds a tonne.
- May raw sugar was unchanged at 16.22 cents per lb.
LONDON: Arabica coffee futures on ICE fell on Tuesday, pressured partly by weakness in Brazil's real currency, which could potentially trigger more producer selling in the world's top exporter of the commodity.
Brazil's currency fell sharply to a three-month low on Tuesday.
COFFEE
May arabica coffee was down 1.9 cents, or 1.4%, at $1.3390 per lb by 1452 GMT, though it had recovered slightly from a session low of $1.3265.
Dealers said the weakening in Brazil's currency would make dollar-denominated prices more attractive to producers in the South American country and could trigger more sales.
The market remained underpinned, however, by the prospect of a smaller crop in Brazil this year, an off-year in the country's biennial crop cycle.
"I think both technically and fundamentally the market is well supported. Brazil will have a much lower crop next year. Not huge news, but I also think that it is underestimated in terms of how it will affect what fair value should be," Cardiff Coffee Trading said in a report.
May robusta coffee was down $15, or 1%, at $1,450 a tonne.
COCOA
May London cocoa fell by 9 pounds, or 0.5%, to 1,787 pounds a tonne, slipping back slightly after the previous session's rise to a three-month high of 1,810 pounds.
Dealers noted that March's premium to May remained choppy in the run-up to the front month's expiry on March 16, with concerns about tightness in supplies of deliverable cocoa persisting despite the recent sharp drop in the open interest.
May New York cocoa was down $29, or 1.1%, at $2,610 a tonne.
SUGAR
May raw sugar was unchanged at 16.22 cents per lb.
May white sugar rose by $5, or 1.1%, to $463.10 a tonne.
Dealers noted that the whites premium had rebounded this week after recent weakness.
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