Raw sugar futures on ICE dropped to a two-week low in a technically weak market on Friday, while a weakening Brazilian currency pushed arabica coffee lower. Cocoa fell, as rains in West Africa improved crop prospects in the world's key growing region. Raw sugar came under pressure from the weaker real and expectations for a huge cane harvest in Brazil, but were underpinned by production downgrades in Asia due to dry weather. "The crush is under way and speeding up in Brazil," said James Kirkup, head of sugar brokerage at ABN Amro in London.
Output in Brazil's key centre-south region was expected to be higher than last year. "In the coming weeks and months the market's attention will be focused on UNICA (cane industry) reports emanating out of Brazil and showing the progress of a centre-south crush that everyone considers the potential 'saviour' in the supply chain," said Nick Penney of Sucden Financial Sugar.
ICE May raw sugar dropped as low as 15.05 cents per lb, a two-week low. It was trading down 0.23 cent, or 1.5 percent, at 15.12 cents by 1307 GMT, losing more than a penny from a 17-month high of 16.75 cents touched last week. Kirkup said the market appeared technically weak. "If we break sub-15.20 cents a lb, that will be the signal that longs will look to clear out," he said.
ICE May white sugar was down $10.3, or 2.3 percent, at $434.30 per tonne. ICE May arabica coffee traded down 2.3 cents, or 1.8 percent, at $1.2515 per lb. ICE May robusta coffee was down $10, or 0.7 percent, at $1,491 per tonne. ICE July London cocoa was above Thursday's more than five-week low of 2,126 pounds per tonne. It traded at 2,144 pounds, down 20 pounds, or 0.9 percent. ICE May New York cocoa was down $21, or 1 percent, at $2,135 per tonne.