LONDON: Raw sugar futures on ICE steadied on Tuesday from sharp falls in the previous session, but gains were capped by demand concerns related to coronavirus lockdowns in China, a strong dollar and growing recession risks.
Arabica coffee hit a six-month low amid the fragile macro-economic sentiment.
SUGAR
July raw sugar rose 0.3% to 18.71 cents per lb at 1550 GMT, having slumped 2.6% on Monday.
Dealers said sugar should find strong support from end-users at the 18.50 level.
Brazilian industry group UNICA said the country’s sugar output reached 934,000 tonnes in the second half of April, a 38.7% fall year-on-year but above analyst forecasts for 769,400 tonnes.
The global sugar market is likely to see a surplus of 4.1 million tonnes in the new season starting October as a 5% production increase in Asia will more than compensate for a 1.1% rise in demand, StoneX said.
August white sugar edged up 0.1% to $521.70 a tonne.
COFFEE
July arabica coffee fell 0.7% to $2.0475 per lb after slumping to a six-month low of $2.0230.
Dealers cited worries over monetary tightening by major central banks and an associated slowdown in global growth.
The dollar is rallying versus major currencies including the Brazilian real, they noted, tempting exporters to sell by raising their returns in local currency terms.
July robusta coffee fell 0.3% to $2,014 a tonne, having earlier hit an eight-month low of $2,004.
COCOA
July New York cocoa fell 0.6% to $2,440 a tonne after touching a five-month low of 2,428 a tonne on Monday.
A mix of abundant rain and sunny spells in most of Ivory Coast’s cocoa-growing regions last week has boosted the April-to-September mid-crop, farmers said.
Dealers noted ICE exchange stocks are on the rise
A group of European Union parliamentarians has asked the European Commission to open negotiations with Ivory Coast and Ghana to address low cocoa prices, it said in a letter.
July London cocoa fell 0.6% to 1,754 pounds per tonne?, having earlier touched a two-week low of 1,749.