Different price direction of coffee and sugar

The coffee price likewise came under pressure yesterday. Arabica coffee fell by 4.1% during trading yesterday to close at 127 US cents per pound. 

One of the reasons for the pronounced fall was the weaker Brazilian real vis-à-vis the US dollar. The sugar price on the other hand climbed by 1.3% to 12.44 US cents per pound despite the weaker real. 

One explanation for the higher sugar price is the physical purchase of 460,000 tons of sugar by a major trading company, which had already acquired 1.9 million tons of sugar back in May. In other words, the trading company had virtually bought up the global supply surplus envisaged in 2014/15, says Commerzbank.