LONDON: Raw sugar futures on ICE fell to a 7-1/2 month low on Tuesday under pressure from plentiful supplies and ongoing currency weakness in top producer Brazil.
SUGAR
July raw sugar fell 0.25 cents, or 2.15pc, to 11.37 cents per lb by 1358 GMT, after dipping to a 7-1/2 month low for the front month of 11.36 cents.
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 $4.70, or 1.45pc, to $318.50 a tonne.
COFFEE
July arabica coffee futures were down 0.10 cents, or 0.1pc, at 89.80 cents per lb.
Dealers said the weakness of Brazil's real had also weighed on arabica coffee prices along with excess supplies.
"Demand continues to do well and sooner or later it will catch up (with supply). It is a very different situation to, say, sugar," Rabobank said in a market note.
July robusta coffee fell $5, or 0.4pc, to $1,329 a tonne.
COCOA
July London cocoa rose 15 pounds, or 0.9pc, to 1,758 pounds a tonne.
July New York cocoa was up $31, or 1.3pc, a $2,418 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.
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