May white sugar ended $20.60 lower at $507.50 per tonne on Monday after hitting a 7-1/2 month low of $505.00. Market back on the defensive as failure of rebound to breach key resistance level late last week sparked a further wave of fund selling. May cocoa on Liffe ended 13 pounds higher at 2,211 pounds a tonne. Market consolidating after a prolonged decline as the market begins to focus on the outlook for mid-crops in Ivory Coast and Ghana.
May robusta coffee settled $15 higher at $1,273 per tonne. Market has finally begun to regain some ground after setting fresh contract lows just a week ago, underpinned by talk of shipment delays out of top producer Vietnam. Earlier, ICE raw sugar also fell sharply, hit by a fresh wave of fund selling into a market already reeling after huge losses in the last few weeks. Cocoa prices were mixed with stronger sterling weighing on Liffe futures while coffee edged up as traders eyed the upcoming harvest in top producer Brazil.
Dealers said the failure of a rebound in the sugar market late last week to breach key resistance levels, combined with improving crop prospects in top consumer India, had helped to put the market back on a downward track. "There is very little confidence around (in the sugar market) and I think the funds are still selling," said David Sadler, a senior sugar futures trader.
Sadler said the outlook for India's sugar crop had improved dramatically with some estimates now it could reach 17 to 18 million tonnes, compared with forecasts as low as 13.5 to 14.0 million a few weeks ago. "The (global) deficit is disappearing quickly and I think that is the problem now.
Unless we can hold here and we start seeing some more offtake I think we are in danger of further falls," he added. Dealers said losses in other commodity markets provided a further bearish influence on sugar. The Reuters-Jefferies CRB index, a global commodities benchmark, hit 5-1/2-week lows on Monday as energy, metals and agricultural markets fell broadly on the dollar's strength.
PAKISTAN BUY: Some dealers said more buying by major importers was needed to help restore confidence but others noted that Egypt, Pakistan, Tunisia and China had all made purchases in the last few days. Pakistan bought on Monday 200,000 tonnes of white sugar at $596.10 a tonne, cost and freight, in a tender opened at the weekend, a spokesman for the state-run Trading Corporation of Pakistan said.
"There has been some fairly decent buying going on the last couple of weeks despite the fact the market is falling like a stone every day," said Rabobank executive director Nick Hungate. "I don't doubt they (major importers) need to buy but they also want to get the best price possible," he added, noting it was not surprising some might delay purchases until the market manages to stabilise. Prices have plunged more than 40 percent, after scaling a 29-year high of 30.40 cents on February 1, with the benchmark contract touching an eight-month low of 17.66 cents last week.
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