London's robusta coffee futures fell more than five percent on Friday to the lowest level in six months on speculative and fund selling, traders said. "Every time London hits new lows there's forced liquidation," a dealer said.
Liffe's second-month November fell to as low as $935 a tonne - a price not seen for the contract since late February. It finished down 5.4 percent at $938. Volume was 11,009 lots out of a total of 20,309.
"Big speculators are pushing the market down," a second trader said. "I can't rule out a move down towards $900."
Speculative sellers in London followed suit from New York's close three percent down on Thursday, and losses deepened after lower prices set off technical signals to sell.
Front-month September dropped $5.7 to $906 and moved 3,993 lots.
Bulls' hopes for a resumption of the rally seen earlier this year are dwindling as large investors continue to cut back on their holdings. Record investment in robusta sent prices - basis second-month - to a 5-1/2 year high of $1,333 in early June.
Fundamental concerns cited as being behind that move were a downturn in Brazil's production cycle and drought damage to crops in Vietnam. Brazil is the world's biggest arabica producer while Vietnam grows the most robusta.
COCOA HIGHER London's cocoa futures scraped higher on Friday, supported by concerns about rising tension in top producer Ivory Coast, dealers said.
Liffe's second-month December concluded six pounds up at 830 a tonne and moved 2,858 lots in an 819-369 price band. Total volume was 5,233 lots.
Forecasts for abundant production in West Africa in 2005/06 have helped drive a sell-off that pushed prices to a 13-month low this month.
A source at the International Cocoa Organisation told Reuters on Thursday that the industry body expects the world cocoa balance to swing from deficit to surplus in the coming agricultural year.
The threat of renewed violence in Ivory Coast has steadied the market though.
SUGAR MOVES UP London white sugar futures closed higher on trade buying amid a lack of sellers on Friday, and traders noted strong underlying trade support amid expectations of firm physical demand.
Front month October settled up $3.8 at $301.6 per tonne in modest volume of 2,782 lots.
December concluded up $4.5 at $285.3 per tonne in volume of 1,265 lots.
"There are no big sellers at the moment. There are more buyers underneath the market than sellers," one trader said.
In afternoon trade, Liffe October futures probed resistance at $300 per tonne for a second consecutive session, reaching a session high of $301.6.
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