Raw sugar futures were slightly higher on Wednesday, consolidating modest gains made the past two days, with small volumes traded as the market was winding down for the year end. March raws were up 0.03 cents, or 0.2 percent, at 18.28 cents at 1507 GMT.
"We have fallen from the year's highs at the end of Q3 to recent lows in Q4 despite the accepted consensus the market is tight nearby," said Thomas Kujawa, co-head of the softs department at Sucden Financial. Prices have plummeted more than 24 percent since the October 6 four-year high of 23.90 cents.
China, the world's largest sugar consumer, imported 140,000 tonnes of sugar in November, customs data showed on Wednesday, down 48 percent from a year ago, due to tighter supply and higher prices. Brazil's government agency Conab said it should produce 39.814 million tonnes of sugar in the 2016/17 crop season, less than the projection given in August of 39.962 million tonnes.
The Brazilian real was down 0.65 percent, also weighing on sugar prices. "It seems we will continue sideways testing the support around 18 cents in the short term but expect the market to drift sideways to lower," Kujawa said. Looking ahead to the 2017/18 season, forecasts of a global sugar surplus after two years of deficit probably mean prices will be weak.
Egypt's state commodity buyer the General Authority for Supply Commodities (GASC) cancelled an international tender to purchase 50,000 tonnes of white sugar, traders said on Wednesday, after receiving only one offer. White sugar March futures were down $1.4, or 0.3 percent, at $491.20 a tonne. Cocoa futures had a modest upturn as markets continued to stabilise after prices dropped to multi-year lows last week. The prospect of a global surplus in the 2016/17 season provides a bearish backdrop to any small gains made now.
March New York cocoa was up $25, or 1.1 percent, at $2,281 a tonne, and March London cocoa was up 6 pounds, or 0.3 percent, at 1,850 pounds a tonne. Robusta coffee futures were lower for the second day. Despite tightness in robusta supply due to prolonged rains in top producer Vietnam, March robusta futures were down $5, or 0.2 percent, at $2,118 a tonne. Robusta futures had rallied in the last week on news that the rainy weather was delaying crops and reducing bean quality. In a thinner market prices were correcting somewhat. March arabica coffee rose 0.15 cents, or 0.1 percent, to $1.4400.