London white sugar futures fell sharply on Monday, weakened by fund and investor profit-taking after the market's recent run-up, dealers said. Robusta coffee futures also finished lower while cocoa ended higher but well below an earlier one-month peak.
August whites ended down $12.70 at $354.40 a tonne. The contract rose last week to a one-month high of $372.50 a tonne after touching a low of $321.50 a month ago.
"We have had quite a nice rebound so I think for today it is profit-taking," Romain Lathiere, fund manager at Diapason Commodities Management, said. Sugar prices had risen sharply in late 2007 and early 2008, as investment funds diverted money into soft commodities from shaky global equity markets.
The sugar market peaked at $407.00, basis August, in early March before soft commodity markets suffered a major technical correction which cut whites prices by about 20 percent. Dealers said a large global supply surplus had helped to keep a lid on prices but added the market was supported by increased demand for sugar-derived ethanol fuel linked to a surge on crude oil prices to a record high.
"There is plenty of sugar available due to an expected increase in Brazilian sugar cane output but we have to wait and see in the coming weeks what proportion of sugar will be used for ethanol," Lathiere said. Robusta coffee futures also ended lower on profit-taking after prices rose to around a one-month high last week.
July ended down $29 at $2,270 a tonne. The contact rose to $2,391 last week, its highest level since March 20. Prices remain far below the 12-1/2-year high for the second month of $2,815 a tonne set in early March but have still risen nearly 20 percent since the start of the year.
Cocoa futures finished higher on fund and investor buying although profit-taking trimmed gains. July cocoa ended up 23 pounds at 1,479 pounds a tonne after earlier rising to a one-month high of 1,520 pounds. The contract peaked at 1,567 pounds on March 14, a 5-1/2 year high for the second month.
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