LONDON: Raw sugar prices on ICE fell by about 3% on Tuesday as oil prices slid on news of “significant” progress in peace talks between Russia and Ukraine.

Russia promised to drastically scale down its military operations in parts of Ukraine, while Ukraine proposed neutral status with international security guarantees.

Oil prices fell by about 5%, which would encourage cane mills in top sugar producer Brazil to produce more of the sweetener going forward and less ethanol, a cane-based biofuel.

SUGAR

May raw sugar fell 2.7% to 19.06 cents per lb by 1520 GMT.

Sugar prices were also weighed down by Brazilian President Jair Bolsonaro’s decision to replace Petrobras CEO Joaquim Silva e Luna after questioning the company’s fuel price increases.

“Most likely the (new Petrobas CEO) will try and keep fuel prices frozen or lower them,” said a dealer, explaining that the move would weigh on ethanol and therefore sugar.

He added, however, that Brazilian mills were not selling aggressively for now and funds have plenty spare cash to go long on futures.

May white sugar fell 2.3% to $542.20 a tonne.

COFFEE

May arabica coffee rose 0.7% to $2.1585 per lb after sliding 3.3% on Monday.

Dealers cited continued worries over demand destruction in Russia and Ukraine as well as in China after Shanghai went into lockdown to curb a surge in COVID-19 cases.

They added, however, that continued strength in the Brazilian real was limiting the downside in arabica. A strong real deters dealers in Brazil from selling dollar-priced arabica by lowering returns in local currency terms.

May robusta coffee slipped 0.1% to $2,121 a tonne.

Coffee exports in top robusta producer Vietnam in the first three months of the year are estimated to have risen 19.4% year on year, data showed.

COCOA

May London cocoa rose 0.2% to 1,775 pounds a tonne. May New York cocoa rose 0.3% to $2,644 a tonne.