SOFTS-Raw sugar stabilizes after hitting 2-week low on production bets in Brazil

Band Maytaal Angel

LONDON, May 27 (Reuters)Raw sugar on ICE stabilized on Friday but remained vulnerable to losses after hitting two-week lows in the previous session as dealers bet Brazil’s top producer will manage to control energy prices.

Falling energy prices are prompting sugar cane mills in Brazil to increase sugar production at the expense of ethanol, a cane-based biofuel whose prices move in sync with energy.

SUGAR

*July raw sugar SBc1 fell 0.1% to 19.52 cents per pound at 2:03 p.m. GMT, after hitting its lowest level since May 13 at 19.27 on Thursday.

* The International Sugar Organization has revised its projection of the world sugar supply balance for 2021/22 from a deficit of 1.92 million tonnes to a surplus of 237,000 tonnes. The organization expects an even larger surplus of 2.77 million tonnes in 2022/23.

* Dealers noted Brazil’s efforts to reduce the state ICMS tax in a bid to lower gasoline prices, saying the bill still needs to pass the Senate. Nonetheless, if this is successful, ethanol prices should fall, dragging sugar lower.

* Earlier this week Brazilian President Jair Bolsonaro, in an effort to rein in energy prices, ousted the CEO of Petrobras.

* Thailand said on Friday it expects to export 7.6 million tonnes of sugar in the 2021/22 production year, 46% more than last year.

* August white sugar LSUc1 slipped 0.1% to $564.60.

a ton.

COFFEE

* July arabica coffee KNc2 edged up 0.1% to $2.2695 per pound, after closing 4.4% higher in the previous session.

* There were reports late Wednesday of a further risk of frost at Brazil’s main producer. Forecaster Climatempo, however, said on Thursday there was no risk at this time and temperatures in growing regions will remain above freezing.

* July robusta coffee LRCc2 fell 0.6% to $2,097 a tonne.

COCOA

* July Cocoa New York CCc1 fell 0.4% to $2,456 a tonne, after hitting its lowest level since late November on Wednesday.

* September London Cocoa LCCc2 fell 0.7% to 1,730 pounds per ton.

(Reporting by Marcelo Teixeira and Maytaal Angel; Editing by David Evans, Kirsten Donovan)

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Rachel J. Bradford