Raw sugar prices fall as Brazilian currency weakens

LONDON: Raw sugar and arabica coffee futures on ICE were lower on Monday, weighed partly by renewed weakness in the currency of Brazil, the top producer of both commodities.

A weaker real encourages Brazilian exporters to sell dollar-priced commodities such as sugar and coffee because it raises their returns in local currency terms.

SUGAR

May raw sugar fell by 0.14 cents, or 0.9%, to 15.62 cents per lb at 1427 GMT.

Dealers noted buying emerged around the day's low of 15.55 cents a lb, a level where it also found support on Friday and in early February.

Dealers were keeping a close watch on the outlook for production in the key Centre-South region of Brazil where a slow start to the harvest is expected.

"Worries about that crop remain, or are even growing, as the forecast rainfall has once again disappointed," broker Marex Spectron said in a report, also noting concern about competition from soybeans for transport to ports in Brazil.

May white sugar fell by $2.10, or 0.5%, to $451.30 a tonne.

COFFEE

May arabica coffee fell by 1.25 cents, or 1.0%, to $1.2775 per lb after dipping to a two-week low of $1.2690.

Dealers noted funds have been scaling back long positions in arabica coffee during the recent decline.

May robusta coffee fell by $4, or 0.3%, to $1,376 a tonne.

COCOA

May London cocoa fell by 4 pounds, or 0.2%, to 1,732 pounds a tonne.

Dealers said concerns that demand in Europe could be curbed as another wave of the COVID-19 pandemic hits the continent were weighing on prices.

May New York cocoa rose by $9, or 0.4%, to $2,502 a tonne.

Rains were below average last week in most of Ivory Coast's cocoa-growing regions, but soil moisture remained at a good level for the April-to-September mid-crop, farmers said on Monday.