Liffe March white sugar ended $32.70 higher at $755.20 per tonne on Monday. Market boosted by a weaker dollar and uncertainty about the outlook for Indian production and exports. Liffe March robusta coffee ended $26 higher at $1,934 per tonne. Market dragged higher by surging arabica futures but failed to keep pace with the ICE market with the harvest in top robusta producer Vietnam now well advanced.
Liffe March cocoa ended unchanged at 1,899 pounds a tonne. Market remains underpinned by political tensions in Ivory Coast despite a generally favourable crop outlook in West Africa. A 2011 Outlook report from Goldman Sachs said that over the medium term, both acreage and yield responses were expected to help raise stocks-to-use from current low levels in many crops, leading to modestly lower - but still historically high - prices in 2012.
Sugar futures extended early gains on investor buying as the euro moved back into positive territory against the dollar. An uncertain outlook for output and exports from India, the world's second-largest producer, also underpinned the market. "Until we get some clarity on India regarding their export policy the market is being kept on tenterhooks," said Sudakshina Unnikrishnan, analyst at Barclays Capital. Sugar industry participants are waiting for an announcement on Indian sugar exports that could relieve a possible supply bottleneck before Brazil's next crop in 2011.
Cocoa futures prices rose in choppy trade in moderate volumes, as concerns eased that political tensions in top producer Ivory Coast could delay cocoa exports, although caution remained. "It's still very much a watch and wait situation," Sudakshina Unnikrishnan, analyst at Barclays Capital said. "If you look at the Ivory Coast supply side the picture is looking quite positive," added Unnikrishnan.
As Ivory Coast supplies over a third of the world's cocoa, dealers are keeping close watch on developments there. Dealers said the cocoa industry had sufficient stocks to take the edge off Ivory Coast concerns, with grinders estimated to be carrying between six and eight months' cover.
"Most of the grinders in Europe appear to have a lot more coverage than they did 12 months ago," a European trader said. The European Union imposed sanctions targeting Ivory Coast incumbent Laurent Gbagbo and his allies on Monday, raising international pressure on him to quit after a disputed election.
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