March white sugar ended off $18.30 at $724.50 a tonne on Friday after hitting $712.90, the lowest level for the benchmark front month in nearly one month. Sugar weighed by broad-based losses in oil and other commodity markets. May cocoa on Liffe ended 41 pounds lower at 2,199 pounds a tonne. Weakness of sterling against the dollar provided some support but could only partially offset the bearish impact of steep losses across commodity markets.
May robusta coffee finished $14 down at $1,330 per tonne after setting a new contract low of $1,325. Strong dollar and losses in other commodities triggered the modest setback. Earlier, raw sugar futures on ICE fell again in early trade on Friday, pressured by a stronger dollar and jitters about global economic health, and moved further from Monday's 29-year peak of 30.40 cents a lb. ICE cocoa and arabica coffee also dropped, weighed by the firm greenback, in light volumes.
Nervousness about debt problems in Greece, Portugal and Spain, dragged on the euro. Financial markets were also nervous ahead of US jobs data expected later on Friday. In the sugar market, a European broker said the focus was on whether the recent slippage in futures prices would trigger physical buying.
"We need to see more movement on the physical sugar before we can say that the market has stabilised," the broker said in a daily market report. Dealers said the sugar market was expected to remain tight for at least another couple of months, although the supply crunch should ease slightly later this year as the new centre-south Brazilian harvest comes onstream.
Sugar prices will reach historic highs by the end of March 2010 as a global supply shortage tightens its grip on the market and increases investor fervour for the sweetener, a Reuters poll showed. Dealers said the cocoa market had been weakened by long liquidation ahead of March's first notice day on February 12. Industry buying may have helped limit the market's fall. Arabica coffee futures were technically oversold after a slide which saw prices hit a 2-1/2 month low on Thursday.
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