LONDON: Raw sugar futures on ICE were lower on Wednesday, slipping back from the prior session’s four-year high, as the market continued to focus on crop conditions in Brazil.
October raw sugar was down 0.19 cents, or 1%, to 19.40 cents per lb at 1305 GMT. The front month climbed to a peak of 19.75 cents on Tuesday - the highest since March 2017.
Dealers said the market’s recent run-up was fuelled by diminishing prospects for production in Brazil, with concerns heightened by a report issued on Tuesday by cane industry group Unica.
The report confirmed damage to crops from unusually harsh frosts in June and July and the sugar season in Brazil could end much earlier than usual.
“If this really turned out to be the case, the global supply of sugar would tighten noticeably, as Brazil is responsible for roughly 40% of global sugar exports. The deficit estimates for the global sugar market in 2021/22 would then need to be revised considerably upwards,” Commerzbank said in a note.
October white sugar rose by $0.50, or 0.1%, to $468.70 a tonne.
September arabica coffee fell by 0.9 cents, or 0.5%, to $1.8150 per lb.
The market remained underpinned, however, by concerns that a severe frost in Brazil last month has dented production prospects in the world’s top exporter.
The International Coffee Organization, in a monthly report, said the average coffee price in July was the highest since November 2014 “as concerns grew about the current and future availability of many origins, especially the world’s largest producer, Brazil.”