LONDON: ICE sugar futures fell on Tuesday, having posted a fourth consecutive annual gain last year, with dealers weighing up bearish political developments in Brazil and improved crop prospects in India and Thailand.
Sugar
March raw sugar fell 1% to 19.85 cents per lb by 1213 GMT, having gained 6.1% last year.
Dealers noted that Brazil’s real currency weakened after the inauguration of President Luiz Inacio Lula and that Lula has frozen fuel taxes for 60 days, which could prompt cane mills to produce more sugar and less ethanol.
Gasoline is usually taxed more heavily than ethanol in Brazil, so freezing the fuel tax decreases ethanol’s price advantage at pumps. A weak real prompts selling because it makes dollar-priced sugar more valuable in local currency terms.
Indian sugar mills’ sugar output in the first three months of the 2022/23 marketing year that started on Oct. 1 rose 3.7% from the same period a year earlier.
March white sugar fell 1.2% to $547.70 a tonne, having gained 11.5% in 2022.
Raw sugar extends retreat, arabica coffee edges up
Coffee
March arabica coffee fell 0.7% to $1.6580 per lb.
Arabica registered an annual loss of 26% in 2022, pressured by concern over slowing demand, a favourable outlook for this year’s crop in top producer Brazil and rising exchange stocks.
Coffee exports from Honduras, central America’s top arabica coffee exporter, fell 15% year on year in December, the national coffee institute said.
March robusta coffee rose 0.3% to $1,804 a tonne, having fallen 24% in 2022.
Cocoa
March London cocoa was down 0.4% at 2,054 pounds a tonne, having advanced by 21% in 2022.
Cocoa arrivals at ports in top grower Ivory Coast reached 1.259 mln tonnes between Oct. 1 and Jan. 1, up 13.7% from the same period last season.
Climate42 said the recent wet season in leading cocoa producers Ivory Coast and Ghana was largely favourable, leaving the soil stocked with water reserves for the dry season.
March New York cocoa fell 1% to $2,574 a tonne, having gained 3% last year.
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