SOFTS-Sugar, coffee and cocoa fall as commodity markets tumble
On ICE, sugar, coffee, and cocoa futures were lower on Wednesday, weighed down by a broad-based drop in commodity markets linked to concerns of increasing inflation, which could cause the US Federal Reserve to lift interest rates.
SUGAR * At 1358 GMT, July raw sugar SBc1 was down 0.21 cents, or 1.2 percent, to 17.00 cents per pound.
* Dealers said the market was still being supported by bad weather and reduced acreage in top exporter Brazil, where some farmers have turned to corn and soybeans.
* Sugar production in Brazil’s main center-south area is expected to drop 6.4 percent to 35.8 million tonnes this year, owing to inadequate rains, according to the Brazilian government.
* Brazilian sugar and ethanol plants are also likely to temporarily reduce sugar production volumes in order to increase ethanol output and address rising demand and high prices for the biofuel in the region, according to consultancy Datagro.
* Continue reading White sugar LSUc1 dropped $4, or 0.9 percent, to $453.70 per tonne in August.
COFFEE * At $1.5035 per pound, July arabica coffee KCc1 was down 2.45 cents, or 1.6 percent.
* Dealers said the market was keeping an eye on the situation in Colombia, where anti-government demonstrations have caused coffee exports to be disrupted.
* With global supplies expected to tighten in the coming months, a decline in arabica production in Brazil this year remained a background supporting factor.
* The price of robusta coffee LRCc2 in July fell $21, or 1.4 percent, to $1,494 per tonne.
COCOA * July London cocoa LCCc1 dropped 37 pounds, or 2.2 percent, to 1,650 pounds per tonne, as the pound’s strength against the dollar added to downward pressure on prices. GBP/USD
* The price of a tonne of New York cocoa CCc1 dropped by $41, or 1.6 percent, to $2,463 in July.
