LONDON: Raw sugar futures slid on Monday as oil prices fell amid hopes that diplomatic efforts by Ukraine and Russia to end their conflict would bear fruit.
Falling energy prices tend to prompt cane mills in top producer Brazil to divert production to sugar from ethanol, a cane-based biofuel.
SUGAR
May raw sugar fell 0.9% to 19.07 cents per lb at 1330 GMT.
The chief executive of Brazil’s Raízen, the world’s largest sugar maker, said state-run oil company Petrobras’ increase in fuel prices was necessary to avoid shortages and said they could rise further.
Petrobas raised gasoline prices 18.8% last week following the surge in global crude oil prices.
Dealers said there is a growing view Brazilian mills will push more cane into ethanol production but much will depend on crude prices and the Brazilian government’s fuel policies.
Speculators sharply increased their net long position in the week to March 8, adding 63,497 contracts to their net long position to total 99,091 contracts, data showed.
May white sugar fell 0.4% to $528 a tonne.
COFFEE
May arabica coffee was flat at $2.2195 per lb, having hit its lowest since mid-November earlier at $2.1805 amid demand worries.
Brazil exported 3.1 million 60-kg bags of green coffee in February, 14.3% less than a year ago but slightly up from the previous month as global trade logistics improved.
Speculators reduced their bullish bets in arabica coffee by 10,006 contracts to 33,740 contracts in the week to March 8.
May robusta coffee rose 0.9% to $2,115 a tonne.
Indonesia’s Lampung province exported 9,027.5 tonnes of robusta coffee beans in February, down 54.18% from the same month last year.
COCOA
May London cocoa rose 0.6% to 1,799 pounds per tonne. Speculators switched from a net short to a net long position of 2,745 contracts in New York cocoa in the week to March 8. Cocoa arrivals at ports in top grower Ivory Coast reached 1.618 million tonnes between Oct. 1 and March 13, up 1.4% from the same period last season, exporters estimated.
May New York cocoa rose 0.7% to $2,637 a tonne.