London sugar falls

Sugar futures fell on fund liquidation weighed by weak crude oil prices and a fall in the CRB commodities index on Tuesday, while origin hedging and a stronger dollar dragged on cocoa and coffee futures. The Reuters-Jefferies CRB index, a global commodities benchmark, fell to 6-1/2-year lows as US oil prices plunged 7 percent and a spike in the dollar pressured other commodities.
Dealers said sell stops were hit when benchmark ICE March raw sugar futures dropped to 13 cents per lb. "Some stops got triggered and we saw some liquidation," said David Sadler, a senior sugar futures trader. "Sugar is over-long (over-bought)." Traders remained focused on how much sugar India, the world's biggest consumer, will need to import.
One European trade source said India's MMTC Ltd had tendered on Monday or Tuesday to import 35,000 tonnes of raw sugar, and added that none was bought. There was no independent confirmation. India has recently swung from net exporter to importer of the sweetener. Earlier it formally allowed duty-free imports of raw sugar for domestic sale on Tuesday, a move traders say will increase purchases by coastal units but total imports may be lower than previously estimated.
ICE March raw sugar futures were down 0.23 cent or 1.7 percent to 13.03 cents per lb at 1738 GMT, while May white sugar settled down $4.70 or 1.4 percent to $391.00 per tonne in moderate turnover of 4,402 lots. In coffee and cocoa markets, dealers talked of producer hedging and the stronger dollar weighing on prices, as US markets adjusted after the Presidents' Day holiday on Monday.
"The dollar is weighing plus, with New York shut yesterday, people had to wait another day to hedge what would have been hedged yesterday," one robusta coffee dealer said. "Fundamentals are neutral to stronger (for coffee), but the larger factor relating to (the health of) the US economy outweighs, purely because of the number of funds involved in commodities at the moment."
London May robusta coffee futures closed down $14 to $1,583 per tonne in moderate volume of 2,955 lots, while ICE May arabicas were down 1.95 cent or 1.7 percent to $1.1310 per lb at 1752 GMT. Cocoa dealers also talked of hedging by producers in top grower Ivory Coast, and said a stronger pound dragged on the London market.
"London is a little bit weaker on the back of hedging overnight from Ivory Coast," one London cocoa dealer said. ICE May cocoa was down $54 or 2 percent to $2,618 per tonne at 1745 GMT, while London May cocoa finished down 15 pounds or 0.9 percent to 1,910 pounds per tonne in modest turnover of 3,882 lots.