January 23, 2019 / 12:50 PM / a month ago

SOFTS-London cocoa hits 6-week low as sterling firms; sugar steadies

LONDON, Jan 23 (Reuters) - London cocoa futures on ICE fell to a six-week low on Wednesday as a firmer British pound and ample supplies from top grower Ivory Coast weighed on prices, while sugar and coffee steadied.

COCOA

* May London cocoa was down 12 pounds, or 0.7 percent, at 1,638 pounds a tonne by 1215 GMT, after falling to 1,636 pounds, its lowest since Dec. 13.

* Dealers pointed to pressure from the pound which firmed on Wednesday after Britain’s opposition Labour Party said it was “highly likely” to back an attempt by lawmakers to prevent a disorderly no-deal Brexit.

* Cocoa stocks from top grower Ivory Coast were also in focus, with dealers noting that supplies were poised to remain plentiful despite a recent slowdown in port arrivals.

* “The arrivals are definitely slowing down a bit,” said one European dealer. “However, we see a good end to the main crop and a strong start to the mid-crop as well. So there’s definitely no lack of supply from Ivory Coast.”

* Barry Callebaut saw first-quarter sales volumes rise 1.7 percent, just short of expectations. Global confectionery sales also grew by just 1.4 percent, data released as part of the company's results here showed.

* However, market participants shrugged off these more modest results, noting that physical demand for cocoa butter - a key ingredient in chocolate - remained strong as stocks in Europe were tightening.

* “Demand is still quite robust,” the dealer noted. “The industry is running down their cover, so they need to replenish it and start buying the market at some point soon.”

* May New York cocoa was down $4, or 0.2 percent, at $2,277 a tonne, hovering near the prior day’s one-month low of $2,266 a tonne.

SUGAR

* March raw sugar was up 0.01 cents, or 0.1 percent, at 12.94 cents per lb.

* Prices dropped sharply in the prior session, dragged down by a decline in crude oil prices and macro-economic pressure.

* Focus remained on the Brazilian real currency, which strengthened on Wednesday.

* A firmer real discourages producer selling in top grower Brazil by reducing local returns on dollar-traded commodities like sugar and coffee.

* March white sugar rose $0.80, or 0.2 percent, to $349.40 a tonne.

COFFEE

* March arabica coffee fell 0.15 cents, or 0.2 percent, to $1.0320 per lb.

* March robusta coffee was unchanged at $1,516 a tonne, after earlier slipping to a three-week low in thin trade. (Reporting by Ana Ionova Editing by Alexandra Hudson)

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