Sugar erases gains, coffee tumbles

ICE sugar
ICE sugar

October 25, 2013

ICE sugar reversed gains on Thursday, continuing to decline from a sharp rally last week triggered by a fire at major warehouses in Brazil, while coffee markets dropped to their lowest in years. Cocoa trading on ICE Futures US dropped for the second straight session, falling from record open interest and a two-year high earlier this week, a level viewed as overbought by many dealers.

ICE March raw sugar futures weakened 0.31 cent, or 1.6 percent, to settle at 18.97 cents per lb, six days after the warehouse fires in Santos pushed it to a one-year high of 20.16 cents, with traders refocusing on fundamentals. “I just don’t think the demand’s there, and that’s why you’re seeing a pull-back in prices,” a London-based analyst said, pointing out that although 180,000 tonnes of sugar had been lost, the loading equipment had escaped damage.

Another broker said strong crops ahead in India and Thailand were capping prices. “2013/14 figures show more sugar being produced than they (trade houses) were expecting six months ago,” the broker said. December white sugar on Liffe closed down $6.70, or 1.3 percent, at $502.30 a tonne.

December arabica coffee futures on ICE ended down 0.25 cent, or 0.2 percent, at $1.1030 per lb, after touching a 4-1/2-year low of $1.0950. The contract dropped for the eighth straight session. “It’s a combination of mostly speculator and a little bit of origin selling here,” said one US dealer. Carsten Fritsch, an analyst at Commerzbank, said that although Brazilian producers were selling at these low prices, they may turn to the government for further aid, given prices are too low to be very profitable.

The Liffe robusta market also extended losses in choppy dealings, dropping to the lowest since June 2010 on pressure from top grower Vietnam’s large crop, which Fritsch said may lead farmers to hold back supply to prop up prices. Liffe January robusta coffee ticked down $4, or 0.3 percent, to settle at $1,582 a tonne, after falling to the lowest in more than three years at $1,562.

In cocoa, ICE December futures slipped $28, or 1 percent, to end at $2,686 a tonne, falling farther below Tuesday’s two-year high at $2,780. The December/March spread widened to a $5 discount versus $2 on Wednesday, when it shifted from a premium. Dealers said the market had been expected to drop, given that they had anticipated some funds would lock in profits after a market rally of around 20 percent over the past three months. London March cocoa closed down 14 pounds, or 0.8 percent, at 1,702 pounds per tonne ($2,700). Courtesy: Reuters

Sugar, Sugar exports, World Agriculture News,
Published in ZaraiMedia.com
Sugar, Sugar exports, World Agriculture News,

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