Sugar and coffee futures fell sharply on a stronger dollar on Wednesday, while London cocoa edged higher on a weaker pound, and dealers said soft commodity prices risked further falls on a glum global economic outlook.
Sugar futures fell on investor and fund selling and risked further downside, pushed lower by falling oil prices and weaker commodities led by oil and the strengthening dollar.
"The stronger dollar - I think that's the main explanation for the decrease of commodities," said Romain Lathiere, fund manager with Swiss-based Diapason Commodities Management. London December white sugar futures dropped to a 10-month low, basis first month, of $309.00 per tonne, and later recovered some ground to stand at $314.00 per tonne, down $5.7 or 1.8 percent, in turnover of 2,137 lots at 1451 GMT.
ICE March raw sugar was down 0.13 cent or 1.2 percent to 11.11 cents a lb. Indian sugar futures rose on Wednesday on expectations a dispute over cane prices may further delay crushing operations in the main producing state.
Coffee futures also fell on investor and fund liquidation linked to the stronger dollar and weaker commodities prices on continuing worries over prospects for demand. ICE December arabicas were down 1.3 cent or 1.1 percent to $1.1295 per lb at 1453 GMT. London January robustas were down $27 or 1.5 percent to $1,759 per tonne in modest turnover of 4,898 lots.
Dealers noted some support from news that Indonesian coffee exporters had delayed shipments of at least 30,000 tonnes of beans to various buyers and could default on delivery. Among the soft commodities complex, only London cocoa saw firm support, primarily on the weaker pound.
US spot-month cocoa futures touched an 11-month low of $1,924 per tonne before clawing back some ground to stand at $2,005, down $32 or 1.6 percent at 1458 GMT. London March cocoa was up 13 pounds or 1 percent at 1,276 pounds per tonne in moderate volume of 3,432 lots.
Buyers have defaulted on around 50,000 tonnes of cocoa beans from Indonesia after prices dropped more than 20 percent in the last two months to track declines in New York futures, traders said on Wednesday. Cocoa arrivals at Ivory Coast's second port of San Pedro reached 13,369 tonnes from October 1 to 12, according to data from the Coffee and Cocoa Bourse (BCC) obtained by Reuters on Tuesday.
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