May robusta coffee futures on the London-based ICE Futures Europe touched $2,077 per tonne on Feb. 17, the highest level since early December, before losing ground to settle at $2,020 a tonne and $46 down on the day. By close on Feb. 18, May robusta was down further at $2,009 a tonne at settlement.
Arabica coffee, meanwhile, continued to trade around one-year lows. May arabicas dipped as low as $1.5205 on New York’s ICE Futures U.S exchange by Feb. 18.
This is a level not seen since February 2014 when prices first started to tick up in response to the severe prolonged drought that hit southern and central Brazil early last year. May arabica subsequently trimmed losses to settle at $1.5695 a pound, 1.9 cents down on the day.
As reported here last week, the arabica market currently is re-assessing its expectations for supplies as recent rains in Brazil’s main growing regions support a better harvest than had been earlier expected. The country is the world’s biggest producer of arabica coffee beans.
Raw sugar futures on ICE turned lower again after midweek but remained near the psychological 15-cents-a-pound level, with the benchmark March contract settling at 15.09 cents a pound on Feb. 18 On Feb. 17, March raw sugar had traded as high as 15.25 cents a pound on ICE U.S.. At the end of last week, ICE March raw sugar dipped to 14.80 cents a pound before trimming losses to settle at 14.88 cents a pound.
A weak Brazilian real against the U.S. dollar, which encourages dollar-denominated exports of Brazilian sugar, as well as rains in the main Center-South growing regions are continuing to weigh on the market.
Reports that India’s cabinet soon could approve a proposal for a subsidy for raw sugar exports from the country were also pressuring the market. India is the world’s second largest sugar producer and the global market already is weighed down by more than ample supplies.
According to India’s Economic Times, the country’s Food Minister Ram Vilas Paswan cleared an increase in the export subsidy for up to 1.4 million tonnes of raw sugar to Rs 4,000 ($64.2) a tonne.
But the country’s cabinet needs to clear the decision. India’s government provided a subsidy of Rs 3,371 a tonne for raw sugar exports until September 2014, after the subsidy was introduced in February last year at a level of Rs 3,300 a tonne for exports of up to 4 million tonnes, according to the newspaper.
White, or refined, sugar in London was trading essentially flat this week, settling on Feb. 18 at $395 a tonne, basis the May contract. May white sugar had ended last week at $390.30 a tonne.
Cocoa futures continued to be underpinned by worries over possible lower mid-crops from West Africa, where 70 percent of the world’s cocoa beans are typically produced. Parts of the region have suffered what some sources believe was one of the worst Harmattan winds in recent years.
The seasonal wind, which brings hot, dry air from the Sahara across West Africa, when severe, can damage cocoa trees. Market concerns are particularly focused on Ghana’s output. The country is the world’s second biggest producer of cocoa beans.
Benchmark May cocoa on New York’s ICE settled at $2,973 a tonne on Feb. 18, $31 up on the day and its highest level since mid-January. London May cocoa also ended higher, closing the day’s trade £6 up at £2,003 a tonne. London May cocoa had finished Feb. 16 at £1,989.
New York cocoa has rebounded around 11 percent already this month from the one-year lows seen at the beginning of February amid weak grindings data – taken to be a measure of demand for the key chocolate-making ingredient – from Western Europe, North America and Asia. London cocoa has rebounded by around 5 percent since the start of February.
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