August 14, 2019 / 11:43 AM / 2 months ago

SOFTS-Sugar prices edge up, but excess supply caps gains

LONDON, Aug 14 (Reuters) - Sugar prices edged up on Wednesday amid some fund short covering, though gains were capped by worries over nearby excess supply.

SUGAR

* October raw sugar was up 0.05 cents, or 0.4%, at 11.77 cents per lb at 1123 GMT.

* Prices have recovered since hitting 10 month lows last week.

* Thomas Kujawa, co-head of softs at Sucden, said gains would likely be short lived given an excess in nearby supply.

* “There’s a lot of Thai sugar around potentially for October (delivery). Cash premiums for Thai’s have weakened,” he said.

* In the wider markets, oil prices and European equities fell on disappointing economic data from China and as Germany’s economy went into reverse, reviving fears of a global recession.

* Falling energy prices can, if sustained, encourage Brazilian cane mills to produce more sugar and less ethanol. Cane is an input for both products.

* In news, Brazilian sugar and ethanol maker Sao Martin is refraining from hedging sugar for the next season, believing prices have reached a floor and are likely to recover in the mid-term.

* October white sugar was up $1.10, or 0.4%, at $318.30 a tonne.

COCOA

* December New York cocoa rose $14, or 0.6%, to $2,220 a tonne, after matching Tuesday’s 4-1/2 month low earlier.

* Cocoa has come under pressure as favourable weather conditions in top grower Ivory Coast have brightened the crop outlook.

* Cocoa arrivals at ports in Ivory Coast reached 2.138 million tonnes between Oct. 1 - Aug. 4, exporters estimated last week, up from 1.972 million tonnes during the same period last season.

* December London cocoa was up 6 pounds, or 0.3%, at 1,748 pounds a tonne, after hitting its lowest since early June.

COFFEE

* December arabica coffee was down 0.7 cents, or 0.7% at 99.00 cents per lb, after falling nearly 4% to an 11 week low on Monday.

* A large crop in Brazil and the potential for a record harvest in 2020 are weighing on coffee.

* A weakening in the Brazilian real has also pressured prices, encouraging producer selling of dollar-denominated coffee.

* December robusta coffee was up $11, or 0.8%, at $1,343 a tonne. (Reporting by Maytaal Angel; Editing by Mark Potter)

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