Raw sugar slides

Raw sugar futures slid around 3 percent on Thursday as India approved export subsidies for the commodity, while arabica coffee fell for the fourth straight day to a one-year low as Brazil's weak currency attracted producer selling. Cocoa was little changed after touching one-month highs. ICE raw sugar futures fell as India gave the green light to incentives for exports of 1.4 million tonnes of raw sugar, potentially adding substantial supplies to the world market.
"They (India) have got to sell. They have substantial stocks and they have debts to pay," one London-based sugar broker said. ICE May raw sugar futures settled down 0.37 cent, or 2.5 percent, at 14.64 cents a lb. "What we will have to analyse now is how much sugar India is really able to export now, as they are about 60 percent of their crop done," said Bruno Lima, manager for sugar and ethanol at INTL FCStone in Campinas, Brazil.
"Last year, we saw no impact after all." Sugar futures were weak prior to the announcement in India with many expecting the announcement, with traders noting further pressure from Brazilian mills returning to the market and the weaker currency there.
A weak real boosts the local-currency returns to Brazilian millers from dollar-denominated sugar sales. May white sugar ended down $7.70, or 2 percent, at $387.30 per tonne, after tumbling 3.3 percent.
Arabica coffee futures extended losses to the lowest since February 2014, removing the premium put in place on concerns about Brazil's 2014 drought and below-normal rains in the current rainy season. While forecasts for rain in Brazil added pressure, meteorologists warned of below-normal precipitation in key growing regions for the next 10 days.
ICE May arabica coffee closed down 4.3 cents, or 2.7 percent, at $1.5265 per lb, having touched a one-year low of $1.5245. The market shrugged off an estimate by Volcafe for 2015/16 global coffee production to rise to 152.8 million 60-kg bags. The Swiss-based coffee division of commodities house ED&F Man forecast a smaller global coffee deficit in 2015/16 when Brazil will harvest 49.4 million bags. May robusta coffee futures finished down $19, or 1 percent, at $1,990 per tonne. ICE May New York cocoa settled up $2, or 0.1 percent, at $2,975 per tonne, having touched a five-week high of $2,985. London May cocoa closed down 4 pounds, or 0.2 percent, at 1,999 pounds per tonne, below the session's one-month high at 2,005 pounds.