Arabica coffee extends losses to 12-year low, sugar slumps

17 Sep, 2018

COFFEE

* December arabica coffee settled down 2.4 cent, or 2.4 percent, at 97.3 cents per lb, after touching the lowest since July 2006 at 97.15 cents.

* Earlier weakness in the Brazilian real against the US dollar was a source of pressure on the market already weighed down by abundant global supplies, traders said.

* A weaker currency in the top grower improves local currency returns on dollar-traded commodities like coffee, encouraging producers to sell more beans.

* "Producers are selling and I think that's where the more recent weakness has come from," one dealer said.

* Expectations for a record crop from top grower Brazil also continued to pressure prices, dealers said.

* Technically, the second-position contract neared oversold levels, though speculators were still hesitant to cover short positions in large volume, dealers said.

* Meanwhile, coffee producers are seeking urgent meetings with major customers such as Nestle, Jacobs Douwe Egberts and Starbucks to find ways to shore up prices that have slid to 12-year lows.

* November robusta coffee settled down $10, or 0.7 percent, at $1,479 per tonne.

SUGAR

* October raw sugar closed down 0.53 cent, or 4.8 percent, at 10.63 cents per lb, the spot contract's biggest one-day tumble since June 4.

* "The market's expectation of imminent sugar exports out of India as the government considers increased subsidy levels has put a damper on short-covering activity," Nick Penney, senior trader at Sucden Financial, said in a note.

* US government data late on Friday showed speculators had cut their net short position from the prior week's record bearish stance as total open interest dropped sharply.

* Total open interest in raw sugar futures, however, fell for the 16th straight session to reach 845,807 lots on Friday when prices slumped 4.5 percent, ICE data show.

* December white sugar settled down $9.60, or 2.8 percent, at $330.10 per tonne.

COCOA

* December New York cocoa settled up $17, or 0.8 percent, at $2,236 per tonne.

* Above average rainfall in most of Ivory Coast's cocoa regions last week continued to boost the October-to-March main crop, farmers said, despite fears the humidity could impact bean drying.

* December London cocoa settled up 1 pound, or 0.1 percent, at 1,585 pounds per tonne.

Copyright Reuters, 2018
 

 

 

 

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