Raw sugar prices fall, arabica coffee bounces off 13-year lows

LONDON: Raw sugar prices on ICE fell on Wednesday as oil slid and traders squared positions after betting the sweetener up to two-week highs, while arabica coffee futures bounced off 13-year lows.

SUGAR

May raw sugar fell 0.18 cent, or 1.4 percent, to 12.47 cents per lb as of 1434 GMT, after touching a two-week high of 12.77 cents on Tuesday.

A dealer said the market was stubbornly range-bound, with funds reluctant to extend their short positions and the downside limited by rising energy prices, which tend to prompt Brazilian mills to use cane to make ethanol rather than sugar.

Oil prices came off highs, however, weighing on sugar.

Mills in Brazil's main centre-south cane-growing region are forecast to allocate 36 percent of the 2019/20 crop to sugar production, near last season's estimated record low of 35 percent.

Brazil's March sugar exports were the smallest for the month since 2012, due in part to increased ethanol production.

May white sugar fell $2.80, or 0.85 percent, to $328.30 a tonne.

COFFEE

May arabica coffee rallied 2.85 cents, or 3.1 percent, to 94.50 cents per lb after dipping on Tuesday to 91.25 cents, the weakest since December 2005.

Arabica prices have plunged around 7 percent so far this year and speculators are extending their net short positions against a backdrop of excess supplies, especially from top producer Brazil.

Helping coffee recover, the Brazilian real rose versus the dollar, discouraging producer selling of dollar-priced coffee.

Honduran coffee exports rose 2.2 percent in March compared to the same month last year.

May robusta coffee rose $30, or 2.1 percent, to $1,444 a tonne after dipping on Tuesday to a low of $1,395, the weakest since March 2016.

COCOA

May London cocoa rose 9 pounds, or 0.51 percent, to 1,779 pounds a tonne after hitting a peak of 1,783 pounds, the highest since Feb. 22.

The market has been supported by concerns that dry weather could reduce the size of the mid-crop in top grower Ivory Coast.

A strong pound kept London cocoa's gains in check, however.

May New York cocoa rose $11, or 0.47 percent, to $2,366 a tonne, having hit its highest since Jan. 14 at $2,374.