May robusta coffee finished $2 lower at $1,316 per tonne on Tuesday. Market struggling to find support in the absence of a strong fundamental story. May cocoa on Liffe ended 8 pounds higher at 2,286 pounds a tonne. Advance linked to a weaker dollar while growing unrest in top producer Ivory Coast provides additional support.
March white sugar ended $3.2 higher at $739.00 a tonne. Market underpinned by tight global supplies and robust demand. In early trade, cocoa futures on ICE rose, boosted by broad-based gains in commodity markets linked to a weaker dollar while growing unrest in top producer Ivory Coast provided additional support.
Raw sugar and arabica coffee prices on ICE also advanced as the dollar weakened against a rebounding euro. The Reuters-Jefferies CRB index, which tracks 19 mostly US traded commodity futures, rose 6.15 points or 2.30 percent to 274.07 points by 1604 GMT.
Dealers said growing tensions in Ivory Coast had also helped to fuel a run-up in cocoa during the last couple of days. "I think it (unrest) is providing a bit of a risk premium to cocoa prices right now," said Barclays Capital analyst Nicholas Snowdon.
Ivory Coast's Prime Minister will announce a new government on Tuesday, an official in the president's office said, as demonstrators marched and blocked roads in protest at the political crisis gripping the country. ICE raw sugar futures rose on the back of the softer dollar while supportive fundamentals continued to underpin the market. "We have a weaker dollar and a general lift across the commodities complex," said James Kirkup, director and head of sugar brokerage at Fortis Bank Nederland.
Merchant and consultancy Czarnikow on Tuesday raised by 10 percent its forecast for the global sugar deficit in 2009/10 to 14.8 million tonnes, against an estimated record deficit of 15.6 million tonnes in 2008/09. "I think it is just a matter of time before the strength of underlying fundamentals support another move up in prices," Barclays Capital analyst Snowdon said.
Kirkup of Fortis Bank Nederland, however, cautioned that a pick-up in physical offtake was needed. "I don't think nearby physical demand is suggesting that prices will rally any time soon," he said. Raw sugar futures hit a 29-year high of 30.40 cents a lb on February 1, driven by tight global supplies and robust demand.
But prices have since fallen, pressured partly by a lack of cash buying, dealers said. "The (robusta) market is struggling to find support. There is not a fundamental story to justify any sustained investment from the fund community," one dealer said, adding roasters also appeared to be well covered at the moment.
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