December white sugar ended $17.50 or nearly 3 percent higher at $611.00 per tonne on Tuesday after soaring to a record peak for the front month of $617.70. Market buoyed by concerns about excessive rains during harvesting in Brazil. March cocoa ended 12 pounds lower at 2,052 pounds a tonne.
Market suffered a modest setback after rising to a 24-1/2 year high for the second month of 2,080 pounds on Monday but remains underpinned by supply concerns in Ivory Coast. November robusta coffee ended $15 lower at $1,390 per tonne, weighed partly by a stronger dollar.
London cocoa fell, weighed by a resurgent pound, and coffee was little changed. Attention in cocoa focused on the coming main crops in West Africa, the world's top producing region. Sugar futures, which doubled this year as India swung from exporter to importer, jumped on nagging concerns over Brazilian output, and on prospects for increased demand for the sweetener from Mexico and the United States.
"If all cylinders are firing at the same time it's an explosive cocktail," said Nick Hungate, soft commodities trader with Rabobank in London, referring to the rally in sugar on the back of worries over supplies in Brazil and Mexico. Hungate said, "I really doubt we've seen the highs of this market."
Worries over the impact on sugar supplies from top producer Brazil due to persistent and excessive rains, combined with expectations of further demand by Mexico, the United States and India, have fuelled bullish sentiment in sugar. "We had some supportive data for both the US and Mexico and you've also got constant worries about higher than average rainfall in Brazil feeding through into people's expectations for the centre-south crop," said Barclays Capital analyst Nick Snowdon.
"I think we are getting fresh data that will support further price gains and it is clearly not just from India and Brazil now, it is from a variety of producer and consumer locations," he added. Traders also focused on expiry of the benchmark ICE raw sugar contract on Wednesday, with traders anticipating a large delivery, possibly in excess of 1 million tonnes.
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