LONDON: Raw sugar futures on ICE fell on Thursday after hitting five-month highs earlier as investors priced in another forecast cold snap this week in top producer Brazil that will likely further damage the cane crop. Arabica coffee futures, having already straddled near seven-year highs this week on damage from last week's frost, fell as investors bet current price levels incorporate the looming freeze and that the damage is already mostly done.
October raw sugar futures were down 1.3% at 18.37 cents per lb at 1522 GMT, having hit a five-month peak earlier of 18.81 cents.
Dealers said although the frosts set to hit sugar areas in Brazil on Friday and Saturday would likely be less severe than last week's, the damage is cumulative and the crop is also already stressed from previous dry weather.
The price bias is therefore to the upside, they said, even though there are signs sugar demand is weak.
October white sugar fell 1.3% to $452.70 a tonne.
September arabica coffee fell 4.5% to $1.9135 per lb.
Dealers said coffee areas in Brazil that might be impacted by frosts later this week are the same areas already damaged by last week's freezing temperatures, leaving little more damage on the cards.