Raw sugar futures on ICE inched lower on Thursday, as the market weighed news of reduced output from top-grower Brazil against ample near-term global supplies, while arabica coffee fell for the fifth straight session. October raw sugar settled down 0.06 cent, or 0.5%, at 12 cents per lb. Market participants continue to weigh signs of plentiful short-term supplies, as indicated by large deliveries of raw and white sugar against the recently expired futures contracts, with signals of reduced future output.
In top-producer Brazil's center-south region, sugar output slumped 19% in the first half of July, cane industry group Unica said. It said about 400,000 hectares of cane fields were affected by frosts earlier this month, which may impact yields.
"The Unica data was definitely more constructive than expected. I suspect people are revising down their sugar production forecasts today," a dealer said. Continued concerns about the weather in India, a top sugar producer and consumer, also underpinned the market. While the monsoon so far has under-performed, rains are likely to be above-average in the coming two weeks, a weather department official said.
World sugar prices are forecast to rise by the end of this year with a global deficit projected for the 2019-20 season, a Reuters survey showed.
October white sugar settled down $1.2, or 0.4%, at $320 per tonne.
September arabica coffee settled down 0.35 cent, or 0.4%, at $1.0065 per lb, after dipping to a one-month low of $1.0030.
Ample global supplies have come back into focus as the threat of a crop-damaging Brazilian frost retreats.
A softer Brazilian real, which hit its weakest in over two weeks against the US dollar, also weighed, dealers said, as a weaker real
can encourage producer selling.
September robusta coffee settled down $2, or nearly 0.2%, at $1,358 per tonne.
Vietnam's domestic coffee prices fell from a week ago with trading activity expected to remain slow until the 2019-20 crop year.
September New York cocoa settled down $29, or 1.2%, at $2,434 per tonne, its third consecutive negative finish.
Market participants remain focused on how the recently announced $400 a tonne "living income differential" by top producers Ivory Coast and Ghana will be implemented.
New York cocoa prices are forecast to end the year marginally above current levels as the market looks set to flip into deficit in the 2019-20 season, a Reuters poll showed. September London cocoa was down 1 pounds, or less than 0.1%, at 1,843 pounds a tonne.
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