NEW YORK/LONDON: Raw sugar and arabica coffee futures on ICE fell sharply on Thursday, pressured by an 8 percent slump in the Brazilian currency following allegations that the country’s president agreed to bribe a witness in corruption probe.

Brazil is the top producer of both commodities.

July raw sugar settled down 0.27 cent, or 1.7 percent, at 16.03 cents per lb, after reaching 15.58 cents.

July volume was heavy at 92,664 contracts, the biggest since April 26.

The spot Brazilian real tumbled by more than 8 percent against the US dollar, reflecting a sharp drop in June futures caused its trading to be halted.

Traders said concerns about a political crisis in Brazil, which triggered the sharp drop in that country’s currency, caused heavy selling in sugar and coffee futures.

“The pressure on the sugar market this morning may also have been compounded by a more extended ‘risk off’ move with further concerns about the political situation in the US putting further pressure on global equity indices,” said Agrilion Commodity Advisers in a note.

The market continued to monitor weather in Brazil with concerns that heavy rains over the next few days could disrupt production.

August white sugar settled down $3.90, or 0.9 percent, at $455.30 per tonne, falling in tandem with raw sugar.

The Trump administration on Thursday formally launched its effort to renegotiate the North American Free Trade Agreement with Canada and Mexico.

On Wednesday, Mexican Economy Minister Ildefonso Guajardo said that a dispute over sugar with the United States could be resolved before a June 5 deadline.

July arabica coffee settled down 4.75 cents, or 3.5 percent, at $1.2965 per lb.

The weak Brazilian real pressured arabica prices sharply lower with traders noting long liquidation by speculators.

“In times of political instability, producers like to hold onto their coffee just for protection,” one US trader said.

July robusta coffee settled down $13, or 0.7 percent, at $1,984 per tonne.

Brazil’s 2017 total coffee crop is expected to fall 11.3 percent from 2016 to 45.6 million bags, as yields fall in most producing regions in the off-year of coffee’s biannual cycle, Brazil’s Conab said.

New York cocoa settled up $30, or 1.5 percent, at $2,084 per tonne, the highest since April 6.

Dealers pointed to supportive technicals, as New York climbed above key resistance levels.

July London cocoa settled up 16 pounds, or 1 percent, at 1,605 pounds per tonne.—Reuters