Sugar slips on ample supplies: coffee and cocoa soar

Raw sugar futures fell on Tuesday, slipping from a four-week high touched a day earlier, as an improving weather outlook in Brazil reinforced sentiment that supplies appear ample. July raw sugar eased by 0.3 cents, or 1.82 percent, to 16.21 cents per lb by 1408 GMT after a session low of 16.12 cents. The contract rose to a four-week high of 16.59 cents in the previous session as heavy rains in top producer Brazil stoked concerns about short-term harvesting delays.
However, dealers said the weather outlook was now improving, renewing worries about ample Brazilian supplies and a global surplus in the 2017/18 season. Sentiment was also depressed by more potential supply from Pakistan after the country's Sugar Advisory Board's recent recommendation for the export of as much as 1.2 million tonnes of additional surplus sugar. "I can't imagine it's going to flood out until more (government) subsidies are promised," one dealer said. "But what it does do is (show) that this sugar is available. And that certainly presents a bit of a weight on the market."
August white sugar fell $6.10, or 1.31 percent, to $460.80 a tonne. The "war on sugar" being waged by governments and consumers to combat public health emergencies such as diabetes is slowing growth in global demand, which could add to other factors in shaping a fundamental shift in future consumption. July robusta coffee rose $12, or 0.62 percent, to $1,937 a tonne, finally finding support after falling sharply on Monday and dipping to a 3-1/2 week low of $1,916 on Tuesday.
"The market is struggling to find a footing," one dealer said, adding that the industry appeared to have adequate cover and there had been some spillover weakness from the arabica market in the past few days. July arabica rose 0.15 cents, or 0.11 percent, to $1.3075 per lb. Dealers said the recent downtrend appeared to have run out of steam and funds could soon start to trim a net short position. "It is starting to get into the realms of an opportunistic short-covering rally," one dealer said.
July London cocoa rose 9 pounds, or 0.6 percent, to 1,575 pounds a tonne. The market was underpinned by further unrest in top grower Ivory Coast. Three demobilised ex-rebel fighters were killed in clashes with police in the city of Bouake on Tuesday. July New York cocoa rose $13, or 0.64 percent, to $2,048 a tonne.