Sugar and coffee prices fall in broad-based selloff

LONDON: Raw sugar futures on ICE slid more than 3pc on Thursday as rising COVID-19 cases in Europe prompted a broad-based selloff in wider financial markets while coffee prices also fell.

SUGAR

May raw sugar fell by 0.55 cent, or 3.5pc to 15.08 cents per lb at 1508 GMT after equalling a three-month low of 15.05 cents set on Tuesday.

Dealers said further weakness in Brazil's real, one of the worst-performing emerging market currencies year-to-date, added to downward pressure on prices.

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.

Mills in Brazil's centre-south area, the world's largest sugar producing region, got off to a slow start in the 2021/22 season as cane crushing in the first half of March came in 43pc below the volumes seen in the same period a year earlier.

May white sugar?? fell 2.55pc to $438.80 a tonne.

An Ethiopian state buyer has issued an international tender to buy up to 320,000 tonnes of white sugar, European traders said.

COFFEE

May arabica coffee fell 1.05 cents or 0.8pc to $1.2545 per lb?, also weighed by the weakness of Brazil's real currency.

Concerns about weak demand are also weighing on coffee, with COVID-19 lockdowns in major consumers such as Germany and France set to curb out-of-home consumption of mostly arabica coffee beans.

May robusta coffee fell 0.8pc to $1,355 a tonne.

COCOA

May New York cocoa?? rose 0.4pc to $2,445 a tonne.

"We maintain our New York cocoa 2021 price average (forecast) at $2,505. The (market) is likely to remain in surplus through 2021/22, and 2021 grindings across the Northern Hemisphere will probably not recover to pre-COVID levels until next year," said Citi in a note.

May London cocoa rose 0.9pc to 1,742 pounds per tonne?.