Liffe December white sugar rises $0.90 to end at $645.00 per tonne on Tuesday. Market underpinned by adverse weather in key producers such as Brazil, Central America, India and Australia. Liffe December cocoa ended 7 pounds lower at 1,893 pounds a tonne. Market remains under pressure, weighed by a favourable outlook for West African main crop.
Liffe November robusta coffee ended $30 higher at $1,766 per tonne with fresh supplies seen limited in the lead up to Vietnam's harvest. Adverse weather in key producers such as Brazil, Central America, India, Russia and Australia, and expectations of tightening global supplies into the first half of 2011, are driving sugar futures higher, Jonathan Kingsman, managing director of Lausanne-based consultancy Kingsman SA said. Central America was struggling to recover from this weekend's Tropical Storm Matthew, the latest storm to hit the region, leaving sugar crops flooded.
Increased interest in the sweetener from index funds has also underpinned the market, Kingsman said. Dealers said the market could eventually challenge the 29-year high of 30.4 cents a lb, touched on February 1, but risked a downside correction before reaching it.
"We need to correct this over-bought situation to have a period of consolidation, and let end-destination (physical) demand catch up again," Kingsman added. The market is now focused on the expiry of the ICE October raw sugar futures contract on Thursday, with Kingsman predicting a delivery tonnage of around 400,000-500,000 tonnes, and one receiver, possibly two.
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