Raw sugar edges up but heads for weekly losses on producer selling

• Arabica coffee also headed for a weekly loss with an abundance of supply.
• The market remains subdued as a fund short covering rally has run out of steam and with producers opting to sell each time prices recover.

LONDON: Raw sugar prices on ICE edged up on Friday but were heading for losses of around 1.5pc this week amid producer selling and a dearth of fund short covering.

Arabica coffee also headed for a weekly loss with an abundance of supply, while New York cocoa steadied.

SUGAR

March raw sugar was up 0.05 cents, or 0.4pc, at 12.46 cents per lb at 1016 GMT, reversing some of the prior session's losses.

The market remains subdued as a fund short covering rally has run out of steam and with producers opting to sell each time prices recover.

A dealer said prices are rangebound between 12 and 13 cents, though a longer term break-out to the upside is still likely.

The sugar market is widely expected to move into deficit this season following two straight years of surplus in which it has built up vast excess stocks.

The U.S. Department of Agriculture (USDA) on Thursday raised its outlook for domestic sugar stocks.

The market is waiting clarification from India, a top producer, on the likely size of the drop in its output this season following adverse weather.

December white sugar was up $1.20, or 0.4pc, at $340.40 a tonne.

COCOA

December New York cocoa dipped $1, or 0.04pc, to $2,459 a tonne as the market consolidated after hitting a low of $2,391 on Tuesday.

Heavy rain last week in most of Ivory Coast's cocoa growing regions could boost harvesting in the coming months but farmers fear beans could start rotting due to high humidity.

Top cocoa producers Ivory Coast and Ghana plan to re-examine the cocoa industry's sustainability schemes as they say chocolate makers have been slow to pay the two nations a living income differential (LID) for their beans.

March London cocoa was down 20 pounds, or 1.1pc, at 1,872 pounds a tonne, as a recovery in sterling made the contract more expensive for holders of other currencies.

Sterling hit a three week high on hopes for a Brexit resolution.

COFFEE

December arabica coffee rose 0.7 cents, or 0.8pc, to 94.20 cents per lb, but headed for a weekly loss of 5pc.

The prospect of a large crop in Brazil next year remains a bearish influence, though dealers say the downside is limited below 90 cents, which is near the cost of production even in Brazil.

November robusta coffee was flat at $1,257 a tonne, heading for losses of 3pc on the week.

The market remains on the defensive in the run-up to the harvest in Vietnam, where weather conditions are looking favourable.