Sugar climbs off 13 month lows, arabica coffee slips

Sugar futures on ICE steadied on Friday at just above their lowest level in more than 13 months on the back of light industry buying and speculative short-covering, although ample global supplies capped gains. July raw sugar rose 0.10 cents, or 0.7 percent, to 14.33 cents per lb by 1351 GMT, reversing course after dipping to 14.09, the lowest level for the front-month since April 2016.
August white sugar rose $1.50, or 0.36 percent, to $423.60 a tonne, after also falling to its lowest level since April 2016. Both markets plunged sharply on Thursday, with New York shedding 4.3 percent in its biggest one-day rout since April. After a rocky start on Friday, prices firmed up on light buying from the industry and low-volume short-covering by speculators, dealers said.
"As prices go down, buyers do tend to get more active," said one dealer. "But you can't get around the fact that we're heading to a surplus. The buyers come forward - but they're only buying what they need." A weaker dollar, which hit seven-month lows on Friday, was also supportive for raw sugar. Fundamental indicators continued to weigh though, with growing expectations of a recovery in Indian production fuelling worries about a sizeable surplus emerging in the 2017/18 season.
Heavy rains in Brazil, which recently sent the market rallying on worries about short-term crop disruptions, are also likely to benefit output in the longer term, adding further to worries about over-supply. Ukraine's emergence as a player in the world sugar market, boasting cheap prices and an expanding global reach, could restrict the European Union's ambitions to regain its position as a major exporter after it liberalises its market this year.
July arabica was down 0.90 cents, or 0.7 percent, at $1.268 per lb, after dipping to $1.265, its weakest since June 2016. The weakness was technically-driven, after prices closed 1.28 percent lower on Thursday. Honduran coffee exports jumped 51.2 percent in May from the same month last season due to an increase in output, the national coffee institute said on Thursday. July robusta coffee rose $7, or 0.35 percent, to$2,008 a tonne. July London cocoa fell 4 pounds, or 0.25 percent, to 1,567 pounds a tonne. July New York cocoa was down $11, or 0.54 percent, at $2,013 a tonne.