March 16, 2020 / 1:24 PM / 18 days ago

SOFTS-Raw sugar, cocoa slide to 6-month lows

LONDON, March 16 (Reuters) - Raw sugar futures on ICE fell to a six-month low on Monday, weighed partly by a further sharp decline in the crude oil market, while cocoa prices were also down sharply.

SUGAR

* May raw sugar was down 0.57 cents, or 4.9%, at 11.13 cents per lb by 1257 GMT after earlier setting a six-month low of 11.05 cents.

* Dealers said funds may have largely liquidated a net long position during the last few days and the market was waiting to see the extent to which they go short.

* Weakness in crude oil prices and a related fall in the gasoline price in Brazil have also led to expectations that mills in the South American country might switch to using more cane to make sugar rather than biofuel ethanol.

* “One of the primary implications of COVID-19 on agri commodity supply is the outlook for sugar and ethanol production in Brazil’s Centre/South,” J.P. Morgan said in a note.

* The fall in gasoline prices is likely to curb demand for sugar-derived ethanol.

* “We continue to monitor this relationship with just over three weeks remaining until the 2020 (cane) harvest commences,” the investment bank added.

* May white sugar fell $10.10, or 2.85%, to $344.90 a tonne.

COCOA

* May New York cocoa fell $82, or 3.4%, at $2,343 a tonne after setting a six-month low of $2,336.

* Dealers said funds were continuing to liquidate long positions in both New York and London cocoa as the coronavirus crisis dampens risk appetite.

* May London cocoa was down 38 pounds, or 2.05%, at 1,818 pounds a tonne.

COFFEE

* May arabica coffee fell 2.75 cents, or 2.6%, to $1.04 per lb.

* Dealers said the market was dragged down by broad-based weakness in commodity markets, although losses were curbed by the continuing decline in exchange stocks.

* May robusta coffee was down $11, or 0.9%, at $1,230 a tonne. (Reporting by Nigel Hunt; Editing by Jan Harvey)

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