LONDON: Raw sugar prices on ICE weakened on Thursday, drifting down towards the prior session's near 11-month low, with the prospect of substantial exports by India in the 2019/20 season putting the market on the defensive.
SUGAR
October raw sugar was down 0.04 cents, or 0.35pc, to 11.33 cents per lb by 1402 GMT. The front month dipped to a low of 11.09 cents on Wednesday, its weakest since early October 2018.
Dealers said India's approval of export incentives for the 2019/20 season remained a bearish influence, although at current prices it appeared unlikely the full 6 million tonnes eligible under the scheme would be exported.
"Given the small deficit outlook for the world market over the 2019/20 season we expect prices to slowly trend higher, but the threat of large Indian sugar exports will likely limit the upside," ING said in a market note.
New sugar export subsidies announced by the Indian government on Wednesday are unsustainable and will only prolong the current cycle of low global sugar prices, Brazilian industry group Unica said on Wednesday.
October white sugar fell $2.30, or 0.7pc, to $306.90 per tonne.
COFFEE
December arabica fell 1.60 cents, or 1.6pc, to 95.95 cents per lb.
Dealers said the recent weakness of Brazil's real currency had weighed on prices during the last few days, while the market was also struggling to absorb excess supplies.
"High supply and the weak real are weighing on coffee prices. However, we envisage a recovery here, based on the currently low price level, thanks to the prospect of a slight tightening of the supply situation," Commerzbank said.
A weaker real can encourage producer selling by increasing dollar-denominated prices in local currency terms.
November robusta coffee was down $7, or 0.5pc, at $1,344 per tonne.
Coffee trading was slow this week in Vietnam with domestic prices unchanged from a week earlier, while supply remained steady in Indonesia despite a main harvest coming to an end.
COCOA
December New York cocoa fell $48, or 2.1pc, to $2,195 per tonne.
Dealers said the market had resumed its downtrend after a short-covering rally as a generally favourable outlook for 2019/20 main crops in West Africa continued to weigh on prices.
December London cocoa slid 23 pounds, or 1.3pc, to 1,693 pounds a tonne.
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