Sugar and cocoa futures rose in light volumes on Friday, with attention firmly focused on the stalling of a proposed $700-billion bailout of the US financial system. Robusta coffee futures traded weaker, in the middle of their recent range.
ICE March raw sugar was up 0.07 cent or 0.5 percent to 14.62 cents a lb at 1206 GMT, while London December white sugar was up $4.9 or 1.2 percent to $404.20 per tonne. Dealers said brisk physical off-take was supporting sugar futures and talked of an Egyptian purchase of a cargo of raw sugar, but there was no independent confirmation.
They also talked of a purchase of up to two cargoes of raw sugar by Malaysian mills for December/January arrival. Dealers referred to an Egyptian buying tender this weekend. "A big focus of the sugar market right now is the credit crunch and what it means for international trade finance," a European broker said, underscoring the nervousness in the market due to the international financial crisis.
Pressure mounted on lawmakers to agree a $700 billion financial rescue plan on Friday after talks at the White House broke down in acrimony and the biggest bank rescue in US history put global markets under massive stress. Coffee and cocoa dealers said the slender volumes were due to the financial markets uncertainty.
Many participants are seeking to do business that does not involve credit lines, they said. "Everyone is watching credit lines," one trader said. ICE December arabicas were down 1.1 cents to $1.3650 at 1218 GMT, while London November robustas were down $21 to $2,126 per tonne in thin turnover of 1,377 lots.
Cocoa markets were little changed against a broadly neutral fundamental backdrop, although traders expressed continuing concerns over the impact of black pod and swollen shoot virus in top producer Ivory Coast ahead of the main crop. ICE December cocoa was up $11 or 0.4 percent to $2,751 a tonne at 1222 GMT, while London March cocoa was up 2 pounds or 0.13 percent to 1,556 pounds per tonne.
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