Raw sugar falls to lowest level in almost three years

Raw sugar futures fell to the lowest level in almost three years on Tuesday, weighed by excess supplies, while New York cocoa dipped to a five-month low. October raw sugar was down 0.21 cent, or 1.9 percent, at 10.61 cents per lb at 1408 GMT after dipping to a low of 10.59 cents, the weakest since August 2015.
Dealers said the weakness of Brazil's real currency had given added impetus to a decline linked to bearish fundamentals with production in Thailand and India rising and demand sluggish. The main supportive factor recently has been concerns about dry weather in Brazil curbing production, although there are some forecasts for modest rainfall over the next few days.
"Market chat is focussed on perceptions there is little scope for further Brazil write down in production," Tom Kujawa, co-ahead of the softs department at Sucden Financial said, adding the crop appeared to be "holding up." The recent weakening in October's discount to March has also reinforced sentiment that the market is struggling to absorb excess supplies and needs to provide an incentive to carry supplies.
October white sugar fell $2.80, or 0.9 percent, to $318 a tonne. Sept New York cocoa was down $34, or 1.5 percent, at $2,205 a tonne after hitting a five-month low of $2,204. Dealers said the market was weakened by some fresh selling by speculators in thin conditions as they continued to scale back a net long position.
A discount for nearby supplies also widened indicating supplies remained ample. "The structure is weaker so that is dragging prices down," one dealer said. Heavy debt exposure to Ivory Coast's largest domestic cocoa exporter, which has been ordered into liquidation, risks destabilising the West African nation's banking sector, bank officials said on Tuesday.
December London cocoa was down 17 pounds, or 1.0 percent, at 1,660 pounds a tonne. September arabica coffee was down 1.15 cents, or 1.0 percent, to $1.1025 per lb, also weighed by the weakness of the currency of top grower Brazil.
Commerzbank said in a market note that a record arabica crop in Brazil was expected while a huge robusta crop was also forecast in Vietnam this year. "Given this backdrop any marked price rise is unlikely despite record-high net short positions," the bank added. September robusta coffee fell $7, or 0.4 percent, to $1,653 a tonne.