NEW YORK/LONDON: Raw sugar future on ICE dipped on Friday, weighed down by lower ethanol prices and concerns about Indian production, while robusta coffee hit a more than three-year low.
SUGAR
July raw sugar settled down 0.22 cent, or 1.8pc, at 12.01 cents per lb, after dipping to 11.97, the weakest for the July contract since October. On the week, the contract shed 5pc.
Prices were breaking out below their recent range of 12 to 13.5 cents, dealers noted.
The July contract was playing catch-up to the weaker May contract that expired Tuesday, dealers said. The reluctance to take delivery weighed on those prices, dealers said.
Declining ethanol prices were also pressuring sugar, said Michael McDougall, managing director at Paragon Global Markets. Lower ethanol prices disincentivize cane mills from producing the biofuel, encouraging them to produce sugar instead.
Concerns about Thai selling and large Indian supplies were also negative factors, McDougall said.
Indian production could rise by 1.5 percent in 2018/19 to a record 33 million tonnes, the Indian Sugar Mills Association said.
ICE August white sugar settled down $2.20, or 0.7pc, at $327.40 per tonne.
COFFEE
ICE July arabica coffee settled down 0.95 cent, or 1pc, at 90.60 per lb, inching towards the 13-year low of 89 cents hit in mid-April.
On the week, the contract fell 3.8pc. The contract has posted declines in 11 of the past 14 weeks. The market has been dragged down by oversupply, especially from Brazil, the biggest and most efficient producer.
Brazil exported 2.68 million bags of coffee in April compared with 1.95 million bags a year ago, data showed.
These prices are becoming a concern in even the most efficient producer, as Brazil's agriculture ministry has said it will reassess the methodology used to set the government's minimum guarantee prices for coffee.
Low prices have contributed to reduced shipments from some producers. Costa Rica's April exports were down 22pc year on year, data showed.
The contract was technically oversold on the relative strength index. Prices were catching up to weaker arabica and pressured by the Brazilian harvest, dealers said.
COCOA
July New York cocoa settled up $5, or 0.2pc, at $2,379 per tonne. The contract rose 1.8pc on the week, its first positive weekly finish in four weeks. July London cocoa settled down 33 pounds, or 1.8pc, at 1,765 pounds per tonne.
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