Raw sugar futures hit five-year low on ample supplies, oil price falls

LONDON: Raw sugar futures hit a five-year low on Friday as they headed for a third consecutive week of losses on ample near-term supplies and sharp oil price falls.

Falling energy prices are bearish for sugar because they can encourage cane mills to produce more sugar and less ethanol, a cane-based biofuel.

SUGAR

Raw sugar fell 3.1percent to 13.24 cents per lb at 1609 GMT, having earlier hit a five-year low of 13.22. White sugar fell 1.8percent to USD410.90 a metric ton.

Oil prices plunged by about 13percent after Iran’s foreign minister said passage for all commercial vessels through the Strait of Hormuz was open for the remaining ceasefire period.

Brazil’s national crop agency Conab raised its forecast for the country’s 2025/26 sugarcane harvest by 1.02percent from its previous estimate to 673.25 million metric tons.

The front-month white sugar contract expired on Wednesday, with a record of nearly half a million tons delivered. Large deliveries usually mean sugar could not achieve a better price in the physical markets.

Broker StoneX said the data reinforced the view that there is high availability and that it “opens the door to a scenario of strong price pressure over the coming months”. The broker also noted sugar demand is weak due to a “significant shift in global food consumption patterns”.

COCOA

London cocoa fell 3.6percent to 2,439 pounds a ton, having closed down 2.2percent. Thursday’s first-quarter cocoa grind data, a measure of demand, was weaker than expected in Europe and North America,

though figures for Asia were strong.

First-half results on Thursday from the leading global cocoa processor and chocolate maker Barry Callebaut were also weak, although the group forecast a return to volume growth in the six months to end-September.

New York cocoa fell4.1percent to USD3,313 a ton, having closed down 3percent.

COFFEE

Robusta coffee fell 2.4percent to USD3,268 a ton, though it remained above last week’s eight-month low. A robusta trader in the biggest producer Vietnam said lower prices had stimulated demand. Arabica coffee fell 1.9percent to USD2.8485 per lb.