(Reuters) – Raw sugar futures on ICE slipped to a fresh six-week low on Tuesday as funds scaled back a huge net long position and nearby premiums slid further on diminished concern about short-term supply tightness.
March raw sugar was off 0.14 cents, or 0.65 percent, at 21.43 cents per lb at 1247 GMT after dipping to a low 21.33 cents, the weakest level for the contract since Sept. 16.
The front month’s premium SB-1=R has fallen steadily to around 0.41 cents on Tuesday from around one cent a month ago.
“The prompt market is clearly crumbling. Analysts’ numbers suggest that high prices have gone a long way to resolving the prospective supply tension in the first quarter of 2017,” Commonwealth Bank of Australia analyst Tobin Gorey said.
December white sugar was $6.20, or 1.1 percent, lower at $573.10 a tonne.
Dealers also noted China had sold its first batch of state sugar reserves in five years on Friday at a 15 percent premium to the minimum price set by the government on buoyant demand from buyers.
Arabica coffee futures were slightly lower as the market consolidated after its recent run-up to the highest levels since February 2015.
December arabica coffee was down 0.15 cent or 0.1 percent at $1.64 per lb. The front month contract peaked at $1.6690 on Friday with prices climbing steadily over the last few months.
Commerzbank, in a market update, said coffee stocks looked set to decline further in the 2016/17 season with a second successive global supply deficit.
“The robusta crop in particular is looking weak in key growing countries such as Brazil, Vietnam and Indonesia. The tightening supply on the coffee market is driving up prices,” Commerzbank said.
January robusta coffee fell $9, or 0.4 percent, to $2,175 a tonne.
Vietnam, the world’s top robusta producer, is forecast to export between 100,000 tonnes and 110,000 tonnes (1.67 million to 1.83 million 60-kg bags) of coffee this month, down from the 130,000 tonnes estimated for October export, traders said on Tuesday.
November’s export volume could be lower because Vietnamese exporters may not be as active due to concerns that rain may affect the harvest, traders in Ho Chi Minh City said.
Cocoa futures were also lower, weighed by an improving crop outlook in top grower Ivory Coast.
December New York cocoa was down $16, or 0.6 percent, at $2,719 a while March London cocoa fell 12 pounds, or 0.6 percent, at 2,186 pounds a tonne.
