US cocoa and raw sugar futures rose on investor dealings, but a stronger pound kept the lid on London cocoa on Friday, dealers said. Tight cocoa bean supplies were expected to provide support to cocoa, but traders said they were wary of the risks of a fund-driven sell-off to take profits. They talked of light industry buying of cocoa.
"I'm less bullish. Figures coming out everywhere are less bullish," one cocoa trader said, referring to a pick-up in arrivals data from top producer Ivory Coast, and disappointing Asian cocoa butter ratios. Cocoa butter ratios, a key indicator of demand, have dropped to their weakest levels in five years in Asia as chocolate makers cut purchases, raising fears that global economic woes are starting to melt demand.
Cocoa arrivals at ports in top grower Ivory Coast reached 745,244 tonnes by February 8, down from 945,120 tonnes in the same period a year ago, according to data from exporters obtained by Reuters on Friday. ICE May cocoa was up $15 or 0.6 percent at $2,664 per tonne at 1623 GMT, while London May cocoa was down one pound at 1,903 pounds per tonne in slim volume of 2,459 lots.
Arabica coffee and raw sugar futures edged up in light trade on Friday, underpinned by the soft dollar and firm market fundamentals. Dealers said activity in the white sugar futures market was likely to be low as the front-month March contract expires on Friday. Coffee trading was mainly chart-driven, but traders said the tighter supply outlook in arabicas augured for more price upside in the New York market than the London robustas market.
Dealers talked of ample near-term supplies of robustas. ICE May coffee futures were up 0.35 cent to $1.1480 per lb at 1626 GMT, while London May robustas were up $18 or 1.1 percent at $1,603 per tonne in thin volume of 3,913 lots. "We saw a little bit of industry buying (in robustas) at the lows," one robusta coffee dealer said.
Sugar futures held steady in routine book-squaring. In the whites market, the front-month March contract goes off the board on Friday, so traders said they were tidying up positions in light volumes. Dealers said they expected a substantial delivery tonnage against the expiry.
"White sugar is good property at the moment," said one trader, referring to the tight availability of whites. Concerns over tight supplies of the sweetener in South Asia and expectations that demand will remain resilient despite the economic slowdown, continued to underpin demand, dealers said.
"The pervasive story is India," said Nick Hungate, soft commodities trader with Rabobank, referring to India's swing from net exporter to importer. ICE March raw sugar futures were up 0.07 cent to 13.20 cents per lb at 1627 GMT, while London March white sugar futures were up $2.60 or 0.7 percent to $390.00 per tonne in modest turnover of 3,710 lots.
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