Arabica coffee futures on ICE fell on Tuesday as the market consolidated after hitting a seven-month high in the previous session on concerns over a forecast cold snap that could hurt crops in top producer Brazil. September arabica coffee fell 1.9 cents, or 1.7%, to $1.0955 per lb at 1407 GMT, after touching $1.1410 on Monday, its highest since November 29. Kona Haque, head of research at ED&F Man, said with the funds being so short for so long and the dollar weakening, frost risk in the southern part of Brazil was enough to spark a short covering rally, with some funds even going long.
"We're still oversupplied but that's been priced into the market for quite a long time," she added. Brazil exported 2.80 million 60-kg bags of coffee in June, up from 2.16 million bags a year ago, government data showed. In the wider markets, the dollar edged lower as optimism from a weekend trade truce between the United States and China faded. A weaker dollar and stronger real tends to discourage selling by Brazilian producers.
September robusta coffee fell $28, or 1.9%, to $1,446 per tonne, after touching a more than three-week peak of $1,489 on Monday. October raw sugar lost 0.23 cents, or 1.8%, to trade at 12.35 cents per lb. There are continued concerns that a weaker-than-normal monsoon in India, a top sugar producer, could curtail sugar production there just as Brazil, another top producer, reduces its output in favour of ethanol.
Brazil exported 1.40 million tonnes of raw sugar in June, down from 1.71 million tonnes a year ago, government data showed. "The uncertainty of the Indian monsoon continues to underpin prices but producer selling above the market and a much reduced fund short position mean the up-side maybe also limited," said a dealer. August white sugar fell $4.60, or 1.4%, to $322.30 per tonne.
September New York cocoa fell $6, or 0.2%, to $2,495 per tonne. September London cocoa fell 2 pounds, or 0.1%, to 1,842 pounds per tonne. Cocoa arrivals at ports in top grower Ivory Coast reached 2.098 million tonnes between October 1 and June 30, exporters estimated on Monday, up about 11% year on year.
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