Markets

Raw sugar slips as dollar gains; tight supplies cap losses

  • May raw sugar fell 1.2% to 16.20 cents per lb.
  • May London cocoa dipped 0.1% to 1,777 pounds a tonne, having lost 1.6% on Friday to head further away from Wednesday's three-month peak.
Published March 8, 2021

LONDON: Raw sugar futures on ICE fell on Monday as the Brazilian real weakened against the dollar, but losses were limited as dealers remained mindful of tight near-term supplies.

Cocoa and coffee also fell.

SUGAR

May raw sugar fell 1.2% to 16.20 cents per lb at 1525 GMT after gaining 0.8% on Friday.

Sugar came under pressure from a stronger dollar and weak Brazilian real, which tempts exporters in Brazil to sell for increased returns in local currency terms.

Dealers said concerns remain over freight issues, lower than expected production in India and uncertainty over the size of the next Brazilian crop.

"We think (the) 2020 tightness can only be explained by accepting that either we have all been over-estimating production, or under-estimating consumption, or both, and therefore that we are already facing a deficit," said broker Marex Spectron.

Speculators reduced their net long position in ICE raw sugar in the week to March 2 by 13,449 contracts to 149,223 contracts, data showed.

May white sugar fell 0.9% to $459.40 a tonne.

Pakistan has issued a new international tender to purchase 50,000 tonnes of white sugar, European traders said.

COCOA

May London cocoa dipped 0.1% to 1,777 pounds a tonne, having lost 1.6% on Friday to head further away from Wednesday's three-month peak.

Funds increased their long position in New York cocoa by 11,377 contracts in the week ending March 2 to 16,157 contracts, data showed.

Dealers said the market is still stuck between pricing in this season's surplus and signs that demand might improve as economies recover while supplies look set to tighten next season.

May New York cocoa rose 0.5% to $2,558 a tonne, having settled 3% down on Friday.

COFFEE

May arabica coffee fell 0.6% to $1.2805 per lb, having hit a two-week low of $1.2800.

May robusta coffee fell 1.3% to $1,363 a tonne, having hit a two-week low of $1,359.

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