LONDON: Raw sugar futures on ICE fell on Thursday, giving up the previous session’s gains, as oil prices plunged on news that the United States was considering a 180 million barrel release from its Strategic Petroleum Reserve.
Lower energy prices tend to prompt cane mills in Brazil to produce more sugar and less ethanol, a cane-based biofuel.
SUGAR
May raw sugar fell 0.6% to 19.36 cents per lb by 1231 GMT.
Also denting risk appetite in sugar, European stocks were set for their biggest quarterly drop since the start of 2020 as hopes for an end to the Russia-Ukraine conflict fade.
Dealers said sugar remains beholden to energy prices and looks well supported overall, though weakness in white sugar prices could eventually weigh on raws.
May white sugar edged up 0.2% to $538.10 a tonne.
COFFEE
May arabica coffee rose 0.4% to $2.2280 per lb. The market hit four month lows mid-March.
Citi said logistical hurdles for shipping coffee out of Brazil have eased while concerns persist about coffee demand destruction in Russia-Ukraine due to the war and in China due to coronavirus lockdowns.
May robusta coffee rose 0.2% to $2,144 a tonne.
Coffee supplies in top robusta producer Vietnam tightened this week as farmers who have already sold most of their stocks held onto the remaining beans in hope of higher prices.
COCOA
May New York cocoa fell 0.7% to $2,667 a tonne, having hit a near three-week peak on Wednesday.
Citi said it has reduced its 2021/22 global deficit forecast by 50,000 tonnes to 200,000 as top producer Ivory Coast looks set to produce a crop of 2.15-2.2 million tonnes. May London cocoa fell 0.6% to 1,787 pounds a tonne.
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