LONDON: Robusta coffee futures on ICE rose on Wednesday, edging away from the prior session’s 8-1/2 month low, but a weak demand outlook, driven partly by the conflict in Ukraine, continued to weigh on prices.
Coffee
July robusta coffee rose 0.45% to $2,018 a tonne by 1048 GMT after dipping to a low of $2,004 on Tuesday – the weakest level since Aug. 27, 2021.
Dealers said the Ukraine conflict could have a greater impact on robusta than arabica coffee while Brazil is in the process of harvesting a large and good quality robusta crop.
“The drop in demand in Russia and Ukraine is mainly for robusta and we are also starting to see an increase in conillon (robusta) exports out of Brazil which was to be expected as we estimated a record robusta crop there,” Rabobank said in a note.
July arabica coffee rose 1.6% to $2.0710 per lb after dipping to a six-month low of $2.0230 on Tuesday.
Global sugar supply heading to large surplus due to Asia
Sugar
July raw sugar rose 0.3% to 18.60 cents per lb.
The market was supported by gains in energy prices while the cane harvest in top producer Brazil was off to a slow start with mills also showing a preference for using the crop to make biofuel ethanol rather than sugar.
Brazilian industry group UNICA said on Tuesday that the country’s sugar output reached 934,000 tonnes in the second half of April, a 38.7% fall year-on-year.
“High energy prices continue to be supportive for ethanol production with mills allocating more cane towards biofuel supply,” ING said in a note.
August white sugar rose 0.04% to $518.50 a tonne.
Cocoa
July New York cocoa rose 1.8% to $2,488 a tonne, climbing further away from Monday’s five-month low of $2,428.
July London cocoa rose 1.9% to 1,791 pounds a tonne.
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