Sugar futures eased on Wednesday as profit-taking and producer selling emerged after the market's recent run-up stalled, while London cocoa was firmer and not far from this week's 24-year high, dealers said. London cocoa underperformed its New York equivalent with a rebound in sterling keeping a lid on the market with West African supply concerns underpinning prices.
Robusta coffee closed slightly weaker. "It is profit-taking (on sugar). At some stage you are going to have a bit of a pullback but it is only down one percent," said Lars Steffensen, managing director of UK-based commodities fund Ebullio Capital Management. March raw sugar fell 0.20 cent to 12.71 cents a lb by 1750 GMT. The contract rose to a peak of 13.05 cents on Monday, its highest level since early October, and equalled that level on Tuesday but failed to make further progress.
A Reuters poll of analysts said the market will move deeper into deficit next season, helping to support prices although the global economic downturn will dampen demand. Indian sugar mills, expecting the government to allow duty-free imports of raws, have struck deals to buy 200,000 tonnes of raw sugar from Brazil at $265-$285 per tonne, two trade sources said on Wednesday.
March whites in London closed $0.20 lower at $371.50 per tonne. Cocoa arrivals at ports in top grower Ivory Coast reached 587,213 tonnes by January 11, down from 835,139 tonnes in the same period a year ago, according to aggregated data from exporters obtained by Reuters on Wednesday. March cocoa on ICE was $54 up at $2,799 a tonne. Prices in London, however, were more subdued, kept in check by the strength of sterling.
May cocoa in London closed 11 pounds higher at 1,999 pounds a tonne. The contract peaked at 2,013 pounds on Monday, a high for the benchmark second month since March 1985. Arabica coffee futures on ICE edged higher with the market looking to consolidate after rising earlier in the week to the highest levels in more than three months.
March rose 0.40 cent to $1.2230 per lb at 1752 GMT. The contract rose as high as $1.2340 on Tuesday, its highest level since mid-October. Robusta coffee futures in London were slightly lower with March ending down $8 at $1,720 a tonne. Dealers noted the spot January position remained extremely volatile ahead of its expiry on Friday, closing $193 lower at $2,145 a tonne.
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