Sugar tumbles as supply glut market beats demand

Sugar prices slipped on the Intercontinental Exchange (ICE) as the sweet commodity saw bountiful supplies beyond market expectations. July raw sugar shed 1.3 per cent at 17.43 cents per lb while August white sugar lost 1 per cent to $450 a tonne.

Market participants said the widening discounts for front month versus second month raw and white sugar indicated nearby supplies remained abundant, but added there was good buying from end-users at around 17.60, keeping prices rangebound.

Data showed sugar production in the key CentreSouth region of top producer Brazil totalled 2.62 million tonnes in the second half of

May, slightly above market expectations. On the other hand, July arabica coffee slid 0.4 per cent to $1.6015 per lb., while July robusta coffee dropped 0.2 per cent to $1,608 a tonne.

Market watchers said the market remained concerned about next year’s crop in top arabica producer Brazil, wherein severe dryness damaged the current crop. Cocoa still struggles for direction following its sharp underperformance this season as prices headed lower. September London cocoa fell 0.3 per cent to 1,617 pounds per tonne, while

September New York cocoa lost 1.5 per cent to $2,396 a tonne. Fitch Solutions said it expects cocoa to trade between 1,600 and 1,750 pounds over the coming weeks of June and July as covid-19 pandemic restrictions continue to hinder chocolate demand.