LONDON: Raw sugar and arabica coffee futures were lower on Tuesday with both markets under pressure from plentiful suppl
LONDON: Raw sugar and arabica coffee futures were lower on Tuesday with both markets under pressure from plentiful supplies and the ongoing currency weakness in top producer Brazil.
July raw sugar fell 0.16 cents, or 1.4pc, to 11.46 cents per lb by 1217 GMT. The front month fell to a 7-1/2 month low of 11.43 cents on Friday.
Dealers said the weakness of Brazil's real currency continued to exert downward pressure on prices and a further depreciation could trigger a test of Friday's low.
A weaker real boosts returns in local currency terms for dollar-denominated commodities and can, therefore, encourage producer selling.
Conditions in the key Centre-South region in Brazil also look set to remain generally dry in the next couple of weeks, allowing cane harvesting to progress.
"Weather in the CS Brazil cane belt is set to improve in the coming days, thus allowing crushing and there seems nothing in the short term fundamentals to spark a rally," Sucden Financial senior trader Nick Penney said in a note.
Dealers said the recent rise in the speculative net short position, however, raised the possibility there could be a short covering rally at some point although the scope of any rebound could be capped by the plentiful stocks.
"It seems the world will have to eat its way through large stocks before we see a sustained reaction to the upside in prices," Penney added.
August white sugar fell $2.90, or 0.9pc, to $320.30 a tonne.
July arabica coffee futures were down 1.30 cents, or 1.45pc, at 88.60 cents per lb.
Dealers said the weakness of Brazil's real had also weighed on arabica coffee prices.
Colombian coffee production and exports in 2019/20 are expected to remain steady from the previous season, according to a report published on Monday from a US Department of Agriculture attache in Bogota.
July robusta coffee fell $13, or 1.0pc, to $1,321 a tonne.
July London cocoa rose 10 pounds, or 0.6pc, to 1,753 pounds a tonne.
July New York cocoa was up $23, or 1.0pc, a $2,410 a tonne.
Below average rainfall last week in most of Ivory Coast's cocoa growing regions, has raised concerns for the April-to-September mid-crop, farmers said on Monday.