White sugar futures rose sharply on Tuesday on speculative buying as the market advanced towards a recent 13-month peak while robusta coffee and cocoa approached multi-year highs, dealers said. London white sugar futures rose on follow through speculative buying and short covering after a rally in raw sugar futures on Monday, dealers said.
March was up $7.00 at $352.90 per tonne at 1200 GMT. White sugar futures could soon probe 13-month highs of $361.00, basis March, touched on January 18. Dealers said expectations of a Fed rate cut to avoid a US recession encouraged buying of dollar-denominated commodities such as sugar.
ICE March was up 0.31 cent to 12.55 cents a lb. Biofuels company Verenium Corp said on Monday it plans to begin building a commercial-scale cellulosic ethanol plant in the south-east United States early next year that would use sources like sugarcane waste.
Robusta coffee futures edged up and looks set to test resistance at Monday's nine-and-a-half year high, boosted by speculative buying. Benchmark March was $7 higher at $2,064 a tonne at 1200 GMT. The contract peaked at $2,069 on Monday, the highest level for the second month since May 1998.
Market approaching key trend line with some chart watchers looking for a close of $2,060, basis March, to reinforce the market's bullish technical outlook. ICE March arabica futures were down 0.10 cent at $1.3415 per lb. London cocoa futures stood marginally higher with the market hovering just below a recent four-and-a-half year high.
May up 1 pound to 1,170 pounds at 1200 GMT. The contract rose to a peak of 1,175 pounds on January 14, the highest level for the second month since May 2003. Selling by producers such as Ghana has been helping to keep a lid on the market.
March cocoa in New York was up $7 at $2,220 a tonne. Cocoa arrivals at ports in Ivory Coast reached around 898,000 tonnes between October 1 and January 27, compared with 830,760 tonnes in the same period the year before, according to an estimate by exporters on Tuesday.
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