LONDON: Raw sugar futures fell on Monday, weakened primarily by a drop in crude oil prices, while arabica coffee rose to a one-month peak.
Lower energy prices could prompt mills in Brazil to boost sugar output as it reduces the incentive for them to use cane to produce biofuel ethanol.
Sugar
May raw sugar fell 0.6% to 20.28 cents per lb by 1341 GMT. The front month has risen on Friday to a 4-1/2 month peak of 20.45 cents.
Dealers noted production in India and Pakistan had been higher than originally expected.
Broker Marex said in a note that the market’s bullish story had “been spoiled to a large extent by the increased cane production in India and Pakistan.”
May white sugar, which expires on Thursday, fell 0.5% to $557.40 a tonne.
Raw sugar prices climb, coffee and cocoa edge up
Coffee
July arabica coffee rose 1.5% to $2.35 per lb after climbing to a one-month high of $2.3570.
Dealers said the recent run-up in prices had been driven by speculative buying while a strengthening in Brazil’s real currency has slowed the pace of farmer sales in the world’s top producer.
Speculators increased a net long position in Arabica coffee on ICE Futures U.S. in the week to April 5, data from the Commodity Futures Trading Commission (CFTC) showed on Friday.
July robusta coffee rose 0.4% to $2,105 a tonne.
Cocoa
July London cocoa was down 0.7% at 1,809 pounds a tonne after earlier peaking at 1,839 pounds - the highest level in almost two months.
Dealers said first-quarter cocoa grind data was likely to provide a short-term focus as the market looks for further indications on the extent to which demand is rebounding from a COVID-19 driven dip.
Europe’s first-quarter grind is due to be published on Thursday, while data covering North America is scheduled to be released on April 21.
July New York cocoa fell 1% to $2,647 a tonne.
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