LONDON: Raw sugar futures fell off their 16-month peaks on Friday but were still headed for two consecutive weeks of gains on tightening supplies and elevated energy prices, while arabica coffee hovered near 10-week lows.
SUGAR
Raw sugar fell 1.5percent to 18.45 cents per lb at 1110 GMT, after hitting a 16-month peak of 18.88 cents on Thursday. Dealers said the run up in sugar has been driven by tight supplies in India, Thailand, Europe and Brazil, as well as the current strength of energy markets, which could encourage more use of cane to make the biofuel ethanol.
Sugar production in Thailand, the world’s second-largest exporter of the commodity after Brazil, is expected to fall 12.5percent to 10.5 million metric tons in the 2026/27 season, an industry official said.
The Indian government has meanwhile asked sugar mills to ensure adequate supplies during the festival season, with domestic mills seeking to import nearly 800,000 tons of duty-free raw sugar. White sugar dipped 0.1percent to USD537.70 a ton.
COFFEE
Arabica coffee fell 1percent to USD2.8515 per lb, after setting a 10-week low of USD2.8210 on Thursday. Top grower Brazil exported a record volume of green coffee for August, shipping 3.82 million bags, a 31.7percent jump compared with last year, industry group Cecafe said.
This year’s harvest in Brazil is now nearly complete and the focus was switching to prospects for the 2027 crop, which is off to a good start with ample rains favouring flowering.
“The market may be short term oversold, but it has also broken below a two month trading range, and that projects to 240.85, another 40 cents lower from here,” said broker ADMIS.
Robusta coffee fell 1percent to USD3,517 a ton.
COCOA
London cocoa rose 3.6percent to £4,497 per ton. “Weather conditions in West Africa do not currently appear to be developing particularly favourably,” said a dealer. Nestle said it is boosting its cocoa buying in Brazil, as it tries to diversify sourcing following supply shocks in West Africa in recent years that drove prices to record highs. New York cocoa rose 3.7percent to USD6,183 a ton.
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