White sugar futures hit a 6-1/2-year low on Thursday as refiners sold the whites-over-raws premium, while arabica coffee dipped and robustas fell with a widening front-month discount. Cocoa futures edged up on technically driven buying.
October white sugar fell by $8.50, or 2.5 percent, to trade at $330.70 a tonne at 1445 GMT, after touching a 6-1/2-year low of $329.00.
The premium of white sugar over raw sugar rose to more than $120 per tonne last week, prompting refineries to sell the premium, pushing down the whites market, brokers said.
"The premium jumped up, then the refineries sold and the market collapsed," one broker said, referring to heavy selling of the whites this week and the October whites premium falling back below $100 per tonne on Thursday for the first time in almost three weeks.
Another broker said: "In the whites market, much air has been let out of the balloon on front-month October."
"Refiners have taken advantage of the recent strength in the premium so high quality whites availability should increase," the broker added.
Consultancy Agrilion said the correction could discourage "some of the bulls who were looking at the white premium strength as sign of hope and that demand was picking up".
October raw sugar futures traded down 0.08 cent, or 0.8 percent, at 10.51 cents a lb at 1446 GMT after hitting a session low of 10.44 cents, within sight of an August 10 seven-year trough of 10.37 cents a lb, pressured by huge global stocks.
Raw sugar and arabica coffee futures edged down, while robusta coffee fell and the robusta front-month discount widened.
The sudden emergence of a premium in front-month robusta this week underlined nervousness over risks that short-position holders could again be held to ransom, with a major trade house believed to control the bulk of certified stocks. .
December arabica traded down 0.5 cent, or 0.4 percent, at $1.3430 per lb.
"Short-term indicators suggest the potential for recent losses to falter near the 40-day moving average at $1.3015 per lb, which holds as immediate support," said Myrto Sokou, senior research analyst with Sucden Financial.
"Further declines could target the $1.2000-$1.2500 area."
September robusta coffee was down $25, or 1.5 percent, at $1,644 per tonne.
Cocoa futures rose on chart-based buying, underpinned by concerns over dryness in parts of top grower Ivory Coast and No. 2 producer Ghana.
New York December cocoa was up $14, or 0.5 percent, at $3,130 a tonne, while London December cocoa traded up 4 pounds, or 0.2 percent, at 2,079 pounds.
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