LONDON: Coffee futures on ICE slipped on Thursday after hitting multi-week highs earlier in the session due to fears of a potentially very strong weather pattern, a “super El Niño”, gathering pace.
Sugar futures fell, tracking weaker oil prices.
COFFEE: Arabica coffee fell 1.6 percent to USD2.6735 per lb at 1527 GMT, having hit its highest since mid-May at USD2.7810.
Robusta coffee rose 0.4 percent to USD3,636 a metric ton, having hit its highest since early March at USD3,680.
El Niño is especially problematic for robusta as it typically brings high temperatures and reduced rains to Vietnam and Indonesia, which grow about 50 percent of the world’s robusta.
In arabica, meanwhile, the pattern initially brings excess rains to top-grower Brazil. While these slow the harvest, they can only boost prices if they significantly damage crop quality or cause fungal disease.
Dealers noted that heavy Brazil rains are forecast to continue intermittently over the next week to 10 days.
SUGAR
Raw sugar fell 1.9 percent to 13.59 cents per lb, having hit a near two-month low of 13.56 cents on Tuesday.
Energy price declines continue to pressure the market by tempting cane mills to produce less ethanol fuel and more sugar. Also China, the world’s largest sugar importer, shipped in 36.8 percent less sugar in May than a year ago, data showed.