LONDON: Raw sugar futures on ICE slipped on Friday to a fresh 2-1/2 year low as ample global supplies weighed, while cocoa retreated from highs touched this week amid a slowdown in fund buying.
SUGAR
May raw sugar was down 0.18 cent, or 1.5 percent, at 11.57 cents per lb by 1338 GMT, its weakest since late September 2015.
Dealers pointed to technical trading in thin volume, coupled with persistent worries about a global oversupply of sugar.
“There’s nothing fundamentally fresh, I think it’s just the weight of all the production coming online,” one dealer said. “You’ve got India, Thailand – you’ve got supplies coming from everywhere.”
Brazilian sugar exports are expected to fall by 6.5 million tonnes in the 2018-19 crop, although dealers said this was likely to be offset by sharply higher production from the likes of India and Thailand.
August white sugar fell $4.30, or 1.3 percent, to $332.90 per tonne.
The premium for the August white sugar contract over the July raws position rose further, to above $80 per tonne.
COCOA
July London cocoa was down 29 pounds, or 1.5 percent, at 1,849 pounds a tonne.
July New York cocoa fell $19, or 0.7 percent, to$2,780 a tonne, after touching its highest since September 2016 earlier in the week.
Dealers said speculative buyers were taking a breather after prices rallied sharply this week.
Data also showed late on Thursday that North American cocoa grindings fell 1.1 percent in the first quarter of 2018.
This was at the low end of expectations that ranged from 1.5 percent below to 2 percent above the same period last year.
“It just tells you that it’s still a bit sluggish in North America,” said one dealer. “Consumption is still slow and it’s not improving.”
The figures stood in sharp contrast to the strengthening New York futures premium over London, with dealers pointing to funds as the key driver.
“The arbitrage is completely distorted and it’s not reflecting any fundamentals here,” the dealer said.
Cocoa processing in Asia rose 7.2 percent in the first quarter, broadly in line with expectations, dealers said.
COFFEE
July arabica coffee rose 0.60 cent, or 0.5 percent, to $1.1685 per lb.
Prices were in consolidation mode, after hitting $1.1530 on Tuesday, their weakest since March 2016.
July robusta coffee was down $8 or 0.5 percent at $1,767 a tonne.
Source: Brecorder
