December white sugar in London ended $11.50 lower at $587.10 per tonne on Thursday, depressed by a firmer dollar and lack of offtake in the physical market. London November coffee ended $13 lower at $1,437 a tonne, also weighed by a stronger dollar. March cocoa in London ended 13 pounds higher at 2,191 pounds a tonne. Market creeping up towards a 24-1/2 year high for the second month of 2,207 pounds set about two weeks ago, supported partly by an improving outlook for demand.
ICE raw sugar, cocoa and coffee futures fell on investor selling in light volumes on Thursday, pressured by falling equity markets and a firmer dollar. "The equity markets closed off (down) post our (commodities') closes (on Wednesday)," said Nick Hungate, a soft commodities trader with Rabobank, adding the stronger dollar dragged on the softs complex. Hungate also referred to a lack of physical offtake weighing on sugar futures. "The slow cash business is a negative," he said.
However, the market fundamentals in sugar remain strong due to concerns over heavy rainfall in top producer Brazil, and expectations of a sharp Indian appetite for imports into 2010. "Disappointing sucrose yields in India are also a concern," one London-based sugar trader said. Dealers referred to steady new crop supplies coming from key West African producing countries, but noted that the global demand picture remained weak.
Dealers also took stock of an end to a three-day strike by growers in top producer Ivory Coast, although the stoppage did not appear to have had a significant market impact this week. Coffee futures also fell, pressured by outside financial markets and the stronger greenback, with traders referring to a large build-up of investor positions.
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