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SOFTS-Raw sugar drops to one-month low after India approves subsidy

Published 26-09-2018, 05:07 pm
SOFTS-Raw sugar drops to one-month low after India approves subsidy
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LONDON, Sept 26 (Reuters) - Raw sugar futures on ICE fell on Wednesday to their lowest in a month after India approved new support measures for its struggling sugar sector, while cocoa and coffee prices steadied.

SUGAR

* October raw sugar SBc1 was down 0.22 cents, or 2.1 percent, at 10.14 cents per lb by 1119 GMT, the weakest for the front month since late August.

* Futures were pressured on Wednesday by news that India's cabinet has approved higher cane payments for farmers as well as a host of measures to incentivise cash-strapped mills to export sugar to the world market. The possibility of Indian subsidies has weighed heavily on prices in recent sessions, with the market shedding nearly 6.5 percent so far this week.

* "The market, with the falls of the past couple of days, might well turn out to have already priced (in) the subsidy," Tobin Gorey of the Commonwealth Bank of Australia said in an update.

* Participants were also closely watching the Brazilian real currency, which has been battered by uncertainty around the country's upcoming elections. BRL=

* A weak currency in the top grower encourages producer selling by boosting local currency returns, pressuring prices.

* December white sugar LSUc1 also fell $3.20, or 1 percent, to $314.30 a tonne.

* A fire last week at a plant in northern France of sugar maker Saint Louis Sucre - a branch of Germany's Suedzucker SZUG.DE , Europe's largest refiner - has prevented the start of beet processing. December London cocoa LCCc1 rose 1 pound, or 0.06 percent, at 1,564 pounds a tonne.

* December New York cocoa CCc1 climbed $9, or 0.4 percent, to $2,204 a tonne.

* Ghana's Cocobod regulator expects the country's annual cocoa output to rise to 1 million tonnes and more in a few years, boosted by enhanced farming methods such as artificial pollination. Banks in Ivory Coast are considering whether to offer a discount on the debt of failed giant cocoa exporter SAF-Cacao to entice buyers, bankers involved in the negotiations said on Tuesday. December arabica coffee KCZ8 rose 0.10 cent, or 0.1 percent, to 97.20 cents per lb.

* Prices dropped in the prior session, weighed by the weak Brazilian real and speculative long-liquidation.

* However, prices managed to hold well above a 12-1/2 year low touched earlier this month, which discouraged further selling, dealers said.

* November robusta coffee LRCX8 was up $4, or 0.3 percent, at $1,511 a tonne.

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