Raw sugar heads back near two-week lows; cocoa also retreats
- Raw sugar fell 0.4% to 14.82 cents per lb
LONDON: Raw sugar futures on ICE slipped on Wednesday, heading back near two-week lows amid a pause in El Nino-linked excess rains in top grower Brazil, while cocoa futures also retreated.
Sugar
Raw sugar fell 0.4% to 14.82 cents per lb at 1318 GMT, after hitting a two-week low on Monday.
Dealers said weather conditions in Brazil have been clear for the past few weeks, allowing the harvest to progress, while monsoon rains in No. 2 grower India have also improved, even if they remain below average.
Against that, however, higher energy prices and Brazil’s move to raise the mandatory ethanol blend in gasoline are limiting losses in the commodity.
Market estimates indicate Brazil will require an additional 1 billion litres of ethanol on account of the new mandate. That means less sugarcane available for mills to produce the sweetener.
“Sugar has become compelling. Brazil’s increasing allocation of sugarcane towards ethanol, export restrictions in India and weather-related risks across Asia have contributed to a significantly more constructive outlook,” said Vontobel in a note.
White sugar was down 2.7% at $451.10 per ton.
Raw sugar rallies on oil price rise, El Nino concerns
Cocoa
ICE London cocoa fell 3.3% to £4,186 a metric ton, reversing sharp gains seen earlier.
The contract gained 20% in volatile trade last week after a wall of speculative money looking for a home as well as an El Nino play hit cocoa and coffee.
El Nino-linked excess rains in top grower West Africa have slowed for now though, easing market jitters about damage to next season’s crop.
The market is meanwhile awaiting second-quarter Europe and North America grind due for release Thursday and expected to show an overall recovery in demand for the chocolate ingredient.
New York cocoa fell 3.2% to $5,621 a ton.
Coffee
ICE arabica coffee rose 1.9% to $3.32215 per lb, having risen as much as 6% intraday Tuesday only to close lower as trading remains volatile as strong speculative activity persists.
El Nino-linked excess rains in top coffee grower Brazil have also slowed recently, allowing the harvest to progress.
The harvest progress remains below average, however, boosting coffee. Cooxupe, Brazil’s largest coffee co-operative, said its farmers had harvested 38.6% of their 2026 crop as of July 10, lagging the 49.3% recorded a year earlier.
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