BY ONOME AMUGE
Raw sugar futures weakened in the closing session of the week on the Intercontinental Exchange (ICE) as the recent weakness in crude oil prices laid pressure on the sweet commodity.
May raw sugar was down 0.7 percent to 19.36 cents per lb, while May white sugar settled 0.5 percent lower to $538.90 a tonne.
Dealers remarked that the commencement of the new sugar season in Centre-South Brazil, the top producing region, is likely to increase focus on energy prices as mills weigh decisions on whether to use newly harvested cane to produce biofuel ethanol or sugar.
Tobin Gorey, commodity analyst at Commonwealth Bank of Australia, opined that the ethanol price, and sugar’s parity equivalent, will provide a stronger anchor for the market.
Meanwhile, the coffee market enjoyed a bullish result as May arabica coffee surged to its fourth consecutive daily rise, gaining 1.15 percent to $2.29 per lb, while May robusta coffee was 0.5 percent firmer at $2,176 a tonne.
Market dealers noted that the recent bout of fund long liquidation had gradually moderated and the market was steadily regaining ground.
On the other hand, cocoa futures stumbled into bearish territory as May New York cocoa traded 1.1 percent lower at $2,622 a tonne, while May London cocoa shed 1.2 percent to 1,748 pounds a tonne, slipping back after setting a more than two-week high of 1,788 pounds the previous day.
Dealers observed that the market remained supported by expectations of a large global deficit in the 2021/22 season, adding that a potential drop in demand linked to the lingering conflict in Ukraine could reduce its size.
In its recent report on the soft commodities market, Fitch Solutions described cocoa and arabica coffee as luxury commodities, noting that the Ukraine war would weigh on demand and prices for the foreseeable future.