Raw sugar slips to 2017 low, arabica coffee also weakens

Raw sugar futures fell to a 2017 low on Wednesday with the market's recent slide given added impetus by a firmer US dollar while arabica coffee and cocoa prices also weakened. May raw sugar fell 0.14 cents or 0.8 percent to 18.26 cents a lb by 1500 GMT after earlier dipping to a low of 18.24 cents, the weakest for the front month since December 27.
The market has been weighed down by diminished prospects for imports by India, at least in the short-term, and Mexico's decision to cancel sugar export permits to the US in a trade dispute. "It remains unclear what further impact the latest cancellation will have on exports to the United States, or where any excess volume will now go in the interim," INTL FCStone analyst Darren Stetzel said in a market update.
Commerzbank, in a market note, also noted the prospects for India's 2017/18 crop had improved. "Because the monsoon rains normalised last year after two years of drought, the 2017/18 production that will be reaching the market from October is likely to be significantly higher, and may again come close to the figure of 25 million tons achieved in 2015/16," Commerzbank said.
Dealers said the market was also looking technically weak after its recent breach of major support levels. May white sugar fell $4.00, or 0.8 percent, to$516.30 a tonne after the front month had earlier dipped to a low of $516, its weakest since December 29. May New York cocoa dipped $12, or 0.6 percent, to $1,905 a tonne. The market touched a 9-1/2 year low of $1,869 last week, on the prospect of a large global surplus in the current 2016/17 season.
May London cocoa was down 9 pounds, or 0.6 percent, at 1,575 pounds a tonne. The sale of German cocoa grinder Euromar Commodities GmbH, which declared insolvency in December, is expected soon, sources with knowledge of the situation said on Wednesday. May robusta rose $2, or 0.1 percent, to $2,171 a tonne with the market consolidating after three consecutive daily declines.
Vietnam, the world's top robusta producer, exported 146,000 tonnes (2.4 million 60-kg bags) of coffee in February, up 4.3 percent from the previous month, Vietnam Customs said on Wednesday, slightly above market expectations. May arabica was off 0.55 cent or 0.4 percent at $1.4015 per lb.