SOFTS-Sugar, coffee and cocoa fall as commodity markets tumble

Credit: REUTERS/KHALID AL-MOUSILY

Adds background, updates prices

LONDON, May 19 (Reuters) - Sugar, coffee and cocoa futures on ICE were lower on Wednesday dragged down by a broad-based decline in commodity markets linked to fears about rising inflation that may prompt the U.S. Federal Reserve to raise interest rates.

SUGAR

* July raw sugar SBc1 fell by 0.21 cent, or 1.2%, to 17.00 cents per lb by 1358 GMT.

* Dealers said the market remained underpinned by adverse weather and lower acreage in top exporter Brazil where some farmers have switched to growing corn and soybeans.

* The Brazilian government expects sugar production from the main center-south region to fall 6.4% compared with the previous crop to 35.8 million tonnes, saying insufficient rains hit sugar cane development.

* Consultancy Datagro also said on Wednesday that Brazilian sugar and ethanol plants are likely to temporarily reduce sugar production volumes to increase ethanol output and address increasing demand and high prices for the biofuel in the country.

* August white sugar LSUc1 fell by $4, or 0.9%, to $453.70 a tonne.

COFFEE

* July arabica coffee KCc1 was down 2.45 cents, or 1.6%, at $1.5035 per lb.

* Dealers said the market was monitoring the situation in Colombia where anti-government protests have disrupted coffee exports.

* A drop in arabica production in Brazil this year also remained a background supportive factor with global supplies expected to tighten over the next few months.

* July robusta coffee LRCc2 fell by $21, or 1.4%, to $1,494 a tonne.

COCOA

* July London cocoa LCCc1 fell by 37 pounds, or 2.2%, to 1,650 pounds a tonne with a stronger pound versus the dollar adding to downward pressure on prices. GBP/

* July New York cocoa CCc1 fell by $41, or 1.6%, to $2,463 a tonne.

(Reporting by Nigel Hunt. Editing by Jane Merriman and Barbara Lewis)

((nigel.hunt@thomsonreuters.com; +44 20 7542 8421; Reuters Messaging: nigel.hunt.thomsonreuters.com@reuters.net ))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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