By Onome Amuge.
Arabica coffee and raw sugar futures settled lower on the Intercontinental Exchange (ICE) with similar losses of around 7 percent to end the month on a bearish platform, marked by strong liquidation from financial investors.
September arabica coffee KCc1 was down 1.2 cent, or 0.5 percent, at $2.172 per pound as the contract fell 7.02 percent in July, despite gaining more than 3.5 percent in the week.
On the other hand, September robusta coffee LRCc1 was up $15, or 0.7 percent, to $2,030 a tonne, gaining 0.6 percent in July.
According to dealers, after liquidation by funds earlier in July, the market has found support, partly by sentiment that this year’s Brazilian crop appears to be slightly lower than some had expected. However, next year’s harvest prospects appear bleak with projections that it could potentially be dented by recent dry weather.
“Coffee growers in Brazil have reported that the crop volumes are lower than they had anticipated, even if the effects of last year’s frost are taken into account,” Commerzbank said in a market update.
For the sugar market, October raw sugar SBc1 lost 0.18 cent, or 1.0 percent, at 17.54 cents per pound. The contract lost 6.9 percent in July.
October white sugar LSUc1 suffered a similar decline, losing $4.40, or 0.8 percent, at $527.20 a tonne. The contract lost 5.28 percent in the month.
Market dealers said a drop in gasoline prices in top producer Brazil could have a mildly bearish impact, potentially reducing demand for cane-derived biofuel ethanol and prompting mills to use more cane to make sugar.
Meanwhile, cocoa ended the month in bullish territory as September New York cocoa CCc1 gained $6, or 0.3 percent, to $2,323 a tonne. The contract was up 1.4 percent in July.
September London cocoa LCCc1 ended the week stable at 1,704 pounds a tonne. The contract was 0.5 percent higher for the month.
The souls of our ancestors will now rest in peace!