Updates with comments from analyst, adds closing prices

NEW YORK/LONDON, June 27 (Reuters)Raw sugar futures on ICE fell to the lowest since early March on Monday as Brazil’s richest state cut taxes on gasoline, possibly leading mills in the country to produce less ethanol and more sugar.

Arabica coffee hit a two-week low while cocoa was also down.

SUGAR

* July raw sugar SBc1 settled down 0.07 cent, or 0.4%, at 18.30 cents per lb, after slumping to its weakest since March 1 at 18.20 cents.

* Dealers said sugar prices, which were rising earlier in the session, dropped amid news that Brazil’s Sao Paulo state, the country’s largest fuel market, cut state taxes on gasoline but kept them unchanged for hydrous ethanol.

* As both gasoline and hydrous ethanol compete for drivers’ preference at pumps, the reduction in the so-called ICMS tax on gasoline will likely cut ethanol’s appeal to car owners, ultimately leading mills to make less ethanol and more sugar.

* German sugar producer Suedzucker SZUG.DE plans “significant” price hikes to offset rising costs and prepares to shift to coal as Russian gas supplies to Western Europe slow.

* August white sugar LSUc1 settled down $2.00, or 0.4%, at $541.60 a tonne.

COFFEE

* September arabica coffee KCc2 settled down 1.15 cents, or 0.5%, at $2.221 per lb, after slipping to a two-week low of $2.19.

* Prices eased even as ICE certified arabica stocks fell again on Monday to 951,000 bags, their lowest since early 2000.

* Citi said that despite the bullish impact of falling certified stocks to coffee prices in the short term, the fundamentals – namely, a looming surplus that it pencils at 3.2 million bags for 2022/23 – could lower prices to around $2.0/lb by the year end.

* September robusta coffee LRCc2 fell $4, or 0.2%, at $2,040 a tonne.

COCOA

* September New York cocoa CCc2 fell $22, or 0.9%, to $2,410 a tonne.

* “World cocoa grindings are at risk of slowing (or contracting) due to the Russia-Ukraine conflict hindering regional demand as well as headwinds to global GDP. This drives our bias for a deflationary price regime in the next 9-12 months,” said Citi.

* It added, however, that cocoa is unlikely to fall to the $2,000-$2,200 range as significant supply growth in the 2022/23 season is not a sure thing, especially with fertilizer supply chain issues.

* September London cocoa LCCc2 fell 19 pounds, or 1.1%, to 1,741 pounds per tonne​​​​​​​​​​.

(Reporting by Marcelo Teixeira and Maytaal Angel; Editing by Shinjini Ganguli and Shailesh Kuber)

((marcelo.teixeira@tr.com; +1 332 220 8062; Reuters Messaging: marcelo.teixeira.thomsonreuters.com@reuters.net – https://twitter.com/tx_marcelo))



Source: Nasdaq

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