The futures contracts sugar Crude prices tumbled on Friday, with the market slipping further from the six-year high set earlier in the week, while crude oil prices coffee also retreated.
March raw sugar was down 42 cents, or 1.9%, at 21.24 cents a pound, having hit a six-year high of 21.86 cents on Wednesday.
The contract gained 1.3% for the week, after rising 6.3% the previous week.
Traders say the recent market surge has been driven in part by lower-than-expected production in India, which has raised concern about supply shortages.
The heavy rains in Indiathe world’s second-biggest producer, led to a reduction in sugarcane crushing and “catalyzed an upward movement in sugar prices,” Fitch Solutions said in a note on Friday.
Brazil’s decision to end the tax exemption on imports of ethanol fuel it may also lead to greater use of sugarcane to produce biofuel domestically at the expense of sugar.
White sugar for March fell $15.50, or 2.7%, to $551.30 a tonne. The contract lost 2% for the week.
March arabica fell 5.1 cents, or 2.9%, to settle at $1.728 a pound, extending its pullback from Wednesday’s three-month high of $1.8420. The contract, however, recorded a gain of 1.7% for the week.
The market has been supported by fund coverage, strong physical premiums in Brazil and some talk that production at the world’s biggest producer may be lower than previously expected in the upcoming 2023/24 season.
Trading company Comexim expects the new 2023/23 Brazilian crop to grow by 10%, but has revised its view downwards for the current crop.
March Robusta coffee fell $18, or 0.9%, to $2,031 a tonne. Lost 1% in the week.
Total global coffee exports in December fell 7.7% year-on-year to 9.81 million 60-kilogram bags, the International Coffee Organization said.
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