LONDON: Sugar, coffee and cocoa futures on ICE fell on Tuesday as the dollar rebounded and sentiment in the wider markets soured, with oil prices sliding 5% as coronavirus infections flared up around the world.
Falling energy prices tempt cane mills in Brazil to ramp up sugar output at the expense of cane-based ethanol fuel, while a strong dollar makes commodities priced in the currency more costly for non-US investors.
October raw sugar was down 0.08 cents, or 0.7%, at 11.86 cents per lb at 1507 GMT, having hit its lowest since late July at 11.78.
Dealers said the market looks vulnerable to further weakness amid a strong dollar, though much will depend on whether funds continue cutting long positions.
Egypt is extending a ban on imports of white and raw sugar for three months in a bid to dispose of accumulated stocks in the country.
October white sugar fell $3.20, or 0.9%, to $355.70 a tonne.
December arabica coffee fell 2.6 cents, or 1.9%, to $1.3140 per lb in volatile trade that saw it slide 5% at one point.
Dealers said coffee was correcting following a stellar rally, weighed by the stronger dollar but not by any fundamental news.
They added news that a rare batch of Brazilian arabica has been certified as deliverable by ICE was not likely to be weighing on prices because the exchange had rejected far more Brazilian coffee than it had certified.
ICE arabica coffee stocks remain at 20-year lows, underpinning coffee, they said.
November robusta coffee fell $9, or 0.6%, to $1,418 a tonne.
December London cocoa fell 10 pounds, or 0.5%, to 1,772 pounds per tonne, retreating from last week's three-month high.
December New York cocoa was down $65, or 2.5%, at $2,530 a tonne, having hit a six-month high last week.
Comments
Comments are closed.