LONDON: Raw sugar futures fell on Monday, dragged down by losses in crude oil and commodity markets linked to a coronavirus lockdown in Shanghai.
Lower energy prices can prompt mills in Brazil to boost sugar output as it reduces the incentive for them to use cane to produce biofuel ethanol.
May raw sugar fell 0.5% to 19.52 cents per lb by 1430 GMT.
Dealers said that an improving outlook for production in India ensured the market has sufficient supplies this season, with a potential cap on exports unlikely to have a significant impact.
India plans to restrict sugar exports for the first time in six years to prevent a surge in domestic prices and could cap this season’s exports at 8 million tonnes, government and industry sources told Reuters.
“The proposed export quota is higher than the government’s expectations of around 7.5 million tonnes of sugar exports for the current year and hence may not provide significant support to sugar prices in the immediate term,” ING said in a note.
May white sugar fell 1.4% to $555 a tonne.
May arabica coffee fell 4% to $2.1305 per lb.
Dealers said the market was on the defensive, with funds scaling back long positions in arabica coffee.
Speculators reduced their net long position in arabica coffee futures on ICE US in the week to March 22, data from the Commodity Futures Trading Commission (CFTC) showed on Friday.
May robusta coffee fell 1% to $2,126 a tonne.
May London cocoa rose 1.7% to 1,753 pounds a tonne. Dealers noted the market continued to derive support from tightening global supplies driven partly by a decline in production in second-largest grower Ghana.
Port arrivals in top grower Ivory Coast, however, continue to run above last season’s pace.
May New York cocoa rose 1.1% to $2,590 a tonne.