Liffe January robusta coffee ended $46 lower at $1,856 per tonne. Market weighed by broad-based losses in commodity markets as the dollar strengthened. Liffe March white sugar ended $10.40 lower at $666.70 per tonne, also weakened by the stronger dollar. Liffe second-month March cocoa ended 3 pounds higher at 1,861 pounds a tonne. Weakness of sterling helped to offset the bearish impact of losses in dollar-denominated commodity markets.
"The stronger dollar is weighing on everything," a London soft commodities dealer said. The sugar market rallied on Monday and early on Tuesday after having suffered its biggest two-day fall in 20 years last week on talk of possible Chinese interest rate rises.
"Technically, the market has bounced firmly off near-term support at around 25.50 cents basis March New York and off the $640 area basis March London," said Nick Penney of brokerage Sucden Financial. Dealers are waiting for a decision from India on how much sugar the world's number 2 producer will export in 2010/11 to help relieve a supply gap before Brazil's next harvest in 2011. Sugar has been underpinned, meanwhile, by low global stock levels.
India will consider freeing up sugar exports only after obtaining a credible output estimate, the farm minister said, which could come at the end of this month, according to trade officials. Coffee and cocoa futures came under downward pressure due to the strong dollar as concerns about spiralling sovereign debt stemming from Ireland undermined the euro. "The macroeconomic picture is having an impact on commodities, mainly through currencies. The stronger dollar is weighing on coffee and cocoa," another London-based soft commodities dealer said.
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