Raw sugar on ICE Futures US rose on Tuesday on news that top consumer India will soon allow 300,000 tonnes of imports into the country. Robusta coffee slipped to a more than three-month low, pressured by speculative selling and easing expectations of a supply squeeze.
October raw sugar settled up 0.28 cent, or 2.04 percent, at 14.03 cents per lb. Prices rose on news that India, the world's largest consumer of sugar, will soon allow imports of 300,000 tonnes of raw sugar on the country's southern ports, said Michael McDougall, director of commodities for
New York-based Societe Generale. "There's been talk for quite some time that they should be allowing more imports. They've been kind of selective about it," he said. Short-covering by funds and a stronger Brazilian real also boosted prices, McDougall said.
The real "helps the ethanol price in relation to the export sugar," McDougall added. October white sugar settled up $3.40, or 0.9 percent, at $377.50 per tonne. November robusta coffee settled down $52, or 2.6 percent, at $1,969 per tonne, after dropping to $1,965, the weakest for the second position since May 26.
There was short-selling pressure, with speculators driving prices lower, dealers said. Expectations that physical supplies will tighten late in the season eased, dampening sentiment, traders said. A sizeable decrease in the September contract's open interest ahead of the start of the delivery period fueled the downbeat sentiment since it signaled there was potentially less appetite than initially expected.
However, downside potential was seen as limited because the lower prices were reviving buying interest. December arabica coffee settled down 1.2 cents, or 0.9 percent, at $1.2785 per lb. Market participants are awaiting the progress of the coffee crop after the Brazilian flowering period, which recently began, said Judy Ganes, president of J Ganes Consulting in Panama.
December London cocoa settled unchanged from the previous session at 1,519 pounds per tonne. December New York cocoa settled down $1, or 0.05 percent, at $1,946 per tonne. The focus remained on the next crop in top grower Ivory Coast after adverse weather earlier in the season spurred worries about output delays, traders said. The crop is "going to be down, but not devastatingly so," Ganes said.