Raw sugar slides 4% on weak Brazil currency, worries about India’s exports

NEW YORK/LONDON — Raw sugar futures fell more than four percent to approach a one-month low on Monday, pressured by a weaker Brazilian currency and worries about possible exports from India, while New York cocoa rallied from a one-month low hit in the previous session.

October raw sugar settled down 0.46 cent or 4.2% at 10.38 cents per pound (/lb), after falling to 10.27 cents/lb, its lowest since Aug. 29. March raw sugar settled down 3.6% or 0.45 cent to 11.23 cents/lb, earlier falling to 11.11, its lowest since Aug. 30.

A further Brazilian real decline against the US dollar added pressure, as a weaker currency in the top grower encourages more producer selling.

“Politics in Brazil as they get ready for a presidential election is pressuring the real,” said Jack Scoville, vice-president of Price Futures Group in Chicago. The election is set to take place on Oct. 7.

Selling was in thin volume as the focus remained on India, where the government is poised to consider further measures this week to support its sugar industry, dealers said.

Dealers also pointed to lackluster appetite to take delivery against the October contract, which expires on Friday, amid worries about receiving sugar from less-desirable origins.

Open interest for the October contract fell by 16,987 contracts in the prior session to 68,809 contracts.

December white sugar settled down $13.30 or four percent at $317.70 per ton, after falling nearly five percent to $314.60, its lowest since Sept. 14.

December New York cocoa settled up $68 or three percent at $2,235 per ton, after rallying to a session high of $2,258.

The market was supported by broader strength in commodities, traders said, as oil prices rose to their highest in four years and the Thomson Reuters Core Commodities Index rallied.

“The bulls saw the market to be vulnerable, because of the increase in shorts” from last week’s US Commodity Futures Trading Commission report, a New York commodities trader said.

December London cocoa settled up 32 pounds or two percent at 1,597 pounds per ton, after reaching 1,605, its highest since Sept. 18.

December arabica coffee settled down 1.4 cents or 1.4% at $0.99/lb, also pressured by the Brazilian real. November robusta coffee settled up $24 or 1.6% at $1,513 per ton. —