New York: Raw sugar futures on ICE fell on Friday, and for the week, as falling energy prices flagged the risk two-year peaks hit the previous session would be hard to sustain. Coffee and cocoa also fell.
March raw sugar settled 1.2 per cent, or 18 cents, lower at 14.39 cents per lb, retreating from Thursday’s twoyear high of 14.90 cents.
The contract fell 0.4 per cent on the week.
Oil extended losses to trade below $61 a barrel, heading for a weekly decline on concern that the coronavirus in China may spread, curbing travel and oil demand.
Lower energy prices can tempt Brazilian cane mills to produce more sugar at the expense of ethanol. Cane is a feedstock for both products.
Dealers said the decline in energy prices had served as a reminder the sugar market has latent production capacity that is easily activated by higher prices.
March white sugar settled lower 0.6 per cent, or $2.20, at $396.80 per tonne, after hitting a 2-/12 year peak of $411.50 on Thursday.
March arabica coffee settled 2.45 cents, or 2.2 per cent lower, at $1.1015 per lb as an attempted recovery from Tuesday’s two-month low faltered.
The contract fell 1.8 per cent on the week. ICE certified arabica stocks have risen 5 per cent this year, pressuring prices, though dealers expect the market to find a floor around current levels having fallen some 20 per cent from December’s two-year peak.
“We’re probably not too bearish at these levels, but no-one is chasing coffee up from here, funds are not adding to longs and in terms of fundamentals, people are still looking for big crops to come out of Vietnam and Brazil,” a dealer said.
March robusta settled lower 3.5 per cent, or $-48, to $1,319 per tonne.
March New York cocoa settled 1.4 per cent lower at $2,733.00 per tonne.
The cocoa market is consolidating, having set a 20-month high of $2,859 on Wednesday on con- cerns about dry weather in top grower Ivory Coast.
Ghana’s graded and sealed cocoa arrivals stood at 4,96,000 tonnes from the start of the season to Dec. 26, slightly up from 4,91,000 tonnes the previous season, figures showed.
March London cocoa fell 23 pounds, or 0.8 per cent, to 1,946 pounds per tonne.
Source: Economic Times
