September 17, 2018 / 5:42 PM / 6 months ago

SOFTS-Arabica coffee extends losses to 12-year low, sugar slumps

(Rewrites throughout, updates prices; adds comment, NEW YORK dateline, ICE data)

NEW YORK/LONDON, Sept 17 (Reuters) - Arabica coffee futures on ICE fell to the lowest in more than 12 years on Monday, pressured by ample global supplies and the weak Brazilian currency, while sugar prices tumbled more than 4 percent on the possibility of strong Indian exports.


* December arabica coffee settled down 2.4 cent, or 2.4 percent, at 97.3 cents per lb, after touching the lowest since July 2006 at 97.15 cents.

* Earlier weakness in the Brazilian real against the U.S. dollar was a source of pressure on the market already weighed down by abundant global supplies, traders said.

* A weaker currency in the top grower improves local currency returns on dollar-traded commodities like coffee, encouraging producers to sell more beans.

* “Producers are selling and I think that’s where the more recent weakness has come from,” one dealer said.

* Expectations for a record crop from top grower Brazil also continued to pressure prices, dealers said.

* Technically, the second-position contract neared oversold levels, though speculators were still hesitant to cover short positions in large volume, dealers said.

* Meanwhile, coffee producers are seeking urgent meetings with major customers such as Nestle, Jacobs Douwe Egberts and Starbucks to find ways to shore up prices that have slid to 12-year lows.

* November robusta coffee settled down $10, or 0.7 percent, at $1,479 per tonne.


* October raw sugar closed down 0.53 cent, or 4.8 percent, at 10.63 cents per lb, the spot contract’s biggest one-day tumble since June 4.

* “The market’s expectation of imminent sugar exports out of India as the government considers increased subsidy levels has put a damper on short-covering activity,” Nick Penney, senior trader at Sucden Financial, said in a note.

* U.S. government data late on Friday showed speculators had cut their net short position from the prior week’s record bearish stance as total open interest dropped sharply.

* Total open interest in raw sugar futures, however, fell for the 16th straight session to reach 845,807 lots on Friday when prices slumped 4.5 percent, ICE data show.

* December white sugar settled down $9.60, or 2.8 percent, at $330.10 per tonne.


* December New York cocoa settled up $17, or 0.8 percent, at $2,236 per tonne.

* Above average rainfall in most of Ivory Coast’s cocoa regions last week continued to boost the October-to-March main crop, farmers said, despite fears the humidity could impact bean drying.

* December London cocoa settled up 1 pound, or 0.1 percent, at 1,585 pounds per tonne. (Reporting by Marcy Nicholson in New York and Ana Ionova in London; editing by David Evans/Emelia Sithole-Matarise and Grant McCool)

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