February 26, 2020 / 1:15 PM / a month ago

REFILE-SOFTS-Sugar, coffee, cocoa slide as coronavirus fears dominate

(Fixes typographical error)

LONDON, Feb 26 (Reuters) - ICE sugar, coffee and cocoa prices slid on Wednesday as crude oil dropped below $50 a barrel after Asia, Europe and the Middle East reported hundreds of new coronavirus cases and the United States warned of an inevitable pandemic.

SUGAR

* March raw sugar fell 0.3 cents, or 2.1%, to 14.83 cents per lb by 1251 GMT, having hit a two week low of 14.80.

* Oil prices hit their lowest since January 2019 as authorities around the world battled to prevent the spread of coronavirus, which has now been found in about 30 countries.

* Weaker energy prices can encourage cane mills in Brazil to produce more sugar at the expense of biofuel ethanol. Cane is a feedstock for both products.

* “At the moment everything’s caught up in the macro gyrations,” said a dealer.

* “I don’t think (funds are) looking to establish short positions, it’s just risk-off (sentiment). They’ll probably re-establish longs when there’s clarity over the global situation,” he added.

* Sugar dealers remain concerned about a widening deficit this season and possibly next, with production falling in key producers such as Thailand and India.

* “There continues to be a ‘window’ of upside opportunity in sugar before our main harvest starts but alas ‘the global health event’ is crushing optimism. We expect the market to trade sideways in the short term,” said Sucden Financial.

* May white sugar fell $11.40, or 2.8%, to $401.30 a tonne, having hit its lowest since late January at $400.

COFFEE

* May arabica coffee fell 1.6 cents, or 1.5%, to $1.0685 per lb, extending its retreat from Friday’s 5.1% surge.

* Arabica is being underpinned by tighter supplies of washed, quality coffee, which has helped boost premiums in physical markets, though the outlook for this year’s crop in top grower Brazil remains favourable.

* Nestle and Starbucks expect new products developed under their coffee alliance will help increase sales. The alliance is expected to help Nestle tackle tough competition in the coffee market from rivals such as JAB Holdings.

* May robusta coffee bucked the trend, rising $4, or 0.3%, to $1,286 a tonne.

COCOA

* May London cocoa fell by 18 pounds, or 0.9%, to 1,985 pounds a tonne.

* Cocoa is being underpinned by worries that hot, dry conditions in West Africa will affect the mid-crop, though worries that high prices will hurt demand are halting the price uptrend.

* Domestic Ivorian cocoa exporters fear going bankrupt because they cannot compete with the higher prices multinational companies are paying for beans, the Ivory Coast’s traders association (GNI) told Reuters.

* May New York cocoa fell $42, or 1.5%, to $2,764 a tonne. (Editing by Nick Zieminski)

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