LONDON: White sugar futures on ICE were sharply lower on Tuesday, slipping back from the previous session’s 5-1/2 year high, while arabica coffee prices also fell, with the weakness of Brazil’s real currency contributing to the drop in both markets.

Brazil is the world’s top producer of sugar and coffee and a weaker real usually prompts selling as it raises returns in local currency terms.

Sugar

August white sugar fell 2.7% to $577.90 a tonne by 1427 GMT. The front month had risen to a 5-1/2 year high of $599.60 on Monday.

Dealers said the whites market remained underpinned by export restrictions in India along with low whites shipments from the European Union and Algeria’s export ban.

July raw sugar fell 2.25% to 19.12 cents per lb.

White sugar futures hit highest in 5-1/2 years amid India export cap

Coffee

July arabica coffee fell 1.7% to $2.3340 per lb.

Fitch Solutions said in a note that it was maintaining its 2022/23 production forecast for Brazil at 60 million bags, noting “cold conditions in mid-May 2022 did not see temperatures fall below crop-damaging levels”.

“Our long-term view on coffee prices remains bearish, informed by our expectations that the global market will return to surplus in 2022/23 and that rising inflation and weaker global growth prospects will weigh on demand before the close of 2022,” the note added.

July robusta coffee fell 0.75% to $2,117 a tonne.

Vietnam exported 881,565 tonnes of coffee in the first five months of this year, up 23.3% from the same period last year, customs data showed on Tuesday.

Cocoa

July New York cocoa fell 0.3% to $2,480 a tonne.

Rainfall was below average last week in most of Ivory Coast’s cocoa-growing regions, but soil moisture remained high and farmers predicted a strong end to the April-to-September mid-crop.

September London cocoa dipped by 0.1% to 1,774 pounds a tonne.