Liffe March robusta coffee futures were up $16 or 0.8 percent at $2,006 a tonne in modest volume of 4,234 lots on Tuesday. London second-month cocoa was up 18 pounds or 0.9 percent at 2,016 pounds per tonne in low turnover of 477 lots. Liffe March white sugar was up $6.50 or 0.8 percent at $804.60 per tonne in low volume of 1,957 lots.
Investment funds piled into arabicas on technical buying. "It's funds (buying) hitting stops. We still have a tight supply situation for (high quality) beans," a coffee futures dealer said. "Last time coffee was at these levels there was virtually no certified coffee available and that isn't the case now," a UK based commodity analyst said. "Overall we've got enough coffee but there are shortages of some types." The analyst added: "With arabica at these prices there's a huge incentive for roasters to use as much robusta as possible. "In Vietnam it was too dry in the first half of the year and too wet recently, which has had more of an effect on quality, but it's not a disaster."
Vietnam's coffee harvest is ending before the New Year, a month earlier than usual, due to high production costs and fear of thieves as prices remain near 28-month highs, industry players said on Tuesday. Sugar prices are moving into a new price arena due to low stock levels and strong demand, and are in a bullish market environment as year-end approaches, merchant Czarnikow said on Tuesday. "With current volatility, it wouldn't be surprising to see New York (ICE) give back 200 or 300 points (2-3 cents/lb) of its gains and still look bullish technically," said Nick Penney of broker Sucden Financial.
"It looks as if selling is sporadic," he added. "We continue to favour the upside." The strongest La Nina weather event in nearly half a century, resulting in heavy rains and flooding, which has damaged crops and flooded mines in Australia and Asia, may be at its peak, the Australian weather bureau said.
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