London robusta coffee futures closed higher on Tuesday on speculative buying as Hurricane Felix headed towards key arabica growing areas in Central America, dealers said. White sugar futures ended lower as prices drifted down towards a recent 21-month low depressed by weak demand while cocoa ended slightly down on speculative selling.
Dealers said the hurricane provided the initial spark for the London coffee market's climb but it then gathered its own momentum with prices reaching a two-week high. Buying subsided after New York arabicas did not open as strongly as expected after Monday's US Labour Day holiday but re-emerged in late trade as US prices began to climb.
November ended $13 higher at $1,788 after touching a two-week high of $1,802. Hurricane Felix ripped into Central America on Tuesday, smashing up a port on Nicaragua's Caribbean coast. Pounding rain was expected in Nicaragua's northern coffee-growing areas and could damage the crop, Nicaraguan coffee exporter group Excan said on Tuesday.
The hurricanes current path also takes it through Honduras and Guatemala, Central America's top two coffee exporters. The Honduran Coffee Institute said on Tuesday it was not, however, expected to affect crops significantly because it would miss major plantations.
London white sugar ended lower with a large global supply surplus and weak demand keeping the market on the defensive. October whites closed down $1.60 at $274.40. The contract set a 21-month low for the front month of $272.00 on August 16. "It is a big struggle to sell refined sugar at the moment," one dealer said.
Dealers noted the lack of demand had been narrowing the whites/raws premium. They noted the London whites/New York raws premium had slipped to around $65 a tonne, down from $70 last week and $74 to $75 in mid-August. London cocoa ended slightly lower on speculative selling as the market hovered just above a recent six-month low. December ended down seven pounds at 951 pounds a tonne.
The contract touched a six-month low of 931 pounds, basis second position, last week. Scale-down trade and industry buying helped to underpin the market but dealers said favourable crop prospects in West Africa remained a key bearish factor.
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