LONDON: Raw sugar futures on ICE recovered on Monday after hitting a one-month low earlier on long liquidation by speculators and signs the market remains well supplied. Arabica coffee prices fell following recent multi-year highs.
July raw sugar rose 0.6% to 16.75 cents per lb at 1341 GMT, having hit a one-month low of 16.54 cents.
Dealers said the extent of the recent raw sugar price collapse has been more than anticipated given ongoing concerns over the crop in top producer Brazil.
They added however that the market is well supplied for now and the futures curve structure is weak, so funds are unlikely to reinstate their long positions for the time being.
ICE raw sugar speculators cut their net long position by 17,655 contracts to 175,918 in the week to May 18.
August white sugar edged up 0.1% to $448 a tonne.
July arabica coffee fell 1% to $1.4865 per lb, having set a four-year peak of $1.5365 on Thursday.
ICE arabica coffee speculators raised their net long position by 683 contracts to 35,346 contracts in the week to May 18.
“Drought in Brazil is hurting plants during a key stage in their development and has been so severe it has limited the number of new nodes that trees have formed to carry the 2022 harvest,” said Saxo Bank in a note.
Elsewhere, road blockades connected to weeks of anti-government protests in Colombia, the world’s second largest arabica exporter, are stymieing coffee exports.
July robusta coffee slipped 0.1% to $1,477 a tonne.
July London cocoa rose 0.4% to 1,640 pounds per tonne.
July New York cocoa fell 1.1% to $2,430 a tonne.
ICE New York cocoa speculators switched to a net long position of 344 contracts in the week to May 18, adding 4,618 contracts.
Rain was scarce across Ivory Coast’s cocoa-growing regions for the second week in a row, farmers said, sparking fears that the current mid-crop could tail off towards the end of June.