Raw sugar sees front-month discount widen on weak demand
- December New York cocoa fell 0.6% to $2,575 a tonne
- December arabica coffee fell 0.7% to $1.93 per lb
- October raw sugar, which expires on Thursday
LONDON: Raw sugar futures on ICE saw the October position weaken further on Monday in the run-up to its expiry later this week as poor demand continued to undermine the market.
Sugar
October raw sugar, which expires on Thursday, fell 0.3% to 19.04 cents per lb by 1139 GMT.
Dealers noted October's discount to March widened further to around 0.93 cent, indicating there was little appetite to take delivery of sugar against the contract.
"The spread (large discount) is a very negative factor, implying not only that we will be carrying a surplus into next year, but that, although supply of CS (Centre-South) Brazil sugar has declined by 6.5/7.0 million tonnes, demand has dropped by more," broker Marex said in a market update.
Speculators reduced their net long position in raw sugar futures on ICE US in the week to Sept. 21, the US Commodity Futures Trading Commission (CFTC) said on Friday.
December white sugar rose 0.6% to $507.40 a tonne.
India's biggest sugar producing state, Uttar Pradesh, has raised the price mills must pay for the new crop by 7.9%, the top official said, announcing the first hike in the cane price in four years.
Raw sugar hits one-month low as funds sell amid weak demand
Coffee
December arabica coffee fell 0.7% to $1.93 per lb, slipping back from Friday's three-week high of $1.9530.
The market remained underpinned by crop concerns in top producer Brazil linked to dry conditions although rains are forecast for some areas towards the end of this week.
November robusta coffee was down 0.4% to $2,140 a tonne.
Cocoa
December New York cocoa fell 0.6% to $2,575 a tonne.
December London cocoa was 0.5% lower at 1,780 pounds a tonne.
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