Robusta coffee futures hit a 16-month low on Friday before recouping losses, while sugar prices were boosted partly by energy market gains. January robusta coffee was unchanged at $1,756 a tonne by 1542 GMT after dipping to a low of $1,737, the weakest level for the second position since July 2016. Dealers said the recent decline had been fuelled partly by technical selling by funds that appear to be increasing the size of a net short position.
Favourable harvest weather in top robusta producer Vietnam also contributed to price weakness. Both the quality and volume of Vietnam's harvest, which started in October, are expected to surpass the previous year, traders said this week, adding that the ratio of mouldy coffee would be significantly lower. March arabica coffee rose by 2.75 cents, or 2.2 percent, to $1.2975 per lb. March raw sugar was up 0.16 cents, or 1.05 percent, at 15.44 cents per lb.
Dealers said the market was supported partly by the strength of energy prices. US oil prices hit their highest levels in more than two years on Friday. March white sugar rose by $2.40, or 0.6 percent, to $397.20 a tonne. China's sugar imports climbed by 60.6 percent year on year in October to 170,000 tonnes, customs data showed on Thursday.
March London cocoa fell by 10 pounds, or 0.6 percent, to 1,570 pounds a tonne. The contract is on track for a weekly loss of more than 2 percent. Dealers said that an improving outlook for production in Ivory Coast weighed, though there will be significant uncertainty about the size of this season's crop at least until early 2018.
Light rains last week in most of Ivory Coast's main cocoa-growing regions will improve output and quality by helping trees to better weather the forthcoming dry season, farmers said on Monday. Prices charts are also becoming more bearish after the recent decline. "The downside pressure continues as futures consolidate below the trend channel, although above key support at 1550," said Sucden Financial technical analyst Geordie Wilkes. March New York cocoa was down $9, or 0.4 percent, at $2,115 a tonne.
Published under arrangements with Reuters.
No content from Business Recorder shall be reproduced, published, broadcast, rewritten for broadcast or publication, or redistributed directly or indirectly in any medium.
Business Recorder shall not be responsible or held liable for any error of fact, opinion or recommendation and also for any loss, financial or otherwise, resulting from business or trade or speculation conducted, or investments made, on the basis of the information posted here. Nor shall Business Recorder be held liable for any actions taken in consequence." >Copyright Reuters, 2017