New York sugar tumbles

Raw sugar futures on ICE got thrashed to close down 10 percent on Thursday after posting their biggest intraday percentage decline in more than a decade as investors grabbed for the cash and ran for the exits on 2010. The arabica coffee and cocoa markets finished quietly lower. The coffee, cocoa and sugar markets trading on ICE Futures US will trade regular hours on Friday and will shut Monday.
"I think that's all that's going on in these markets - profit-taking," Jack Scoville, an analyst for brokers The Price Group in Chicago, said, adding the same can be said of the entire softs complex. Despite the day's sharp losses, after the spot contract hit a 30-year high at 34.77 cents per lb on Wednesday, raw sugar futures were still on course for a third consecutive yearly gain after seeing the most volatile year since 1981.
ICE March raw sugar futures dropped 3.45 cent or by 10.2 percent to finish at 30.38 cents per lb, after falling 12.8 percent intraday, the biggest daily percentage drop since 2000. The selling intensified below 33 and then 32 cents. Physical demand is expected to decline due to the current high prices, senior trade sources said.
"We expect some demand destruction," said Alan Wood, managing director of London-based merchant Czarnikow. Wood said he expected the raw sugar market to be well supported before expiry of the ICE March raw sugar futures contract on February 28 due to tight supplies and low inventories.
Trading in the first few weeks of 2011 will be dominated by "a lot of fund rebalancing," Scoville said. Arabica coffee fell, turning lower after failing to breach last week's 13-1/2-year high at $2.4225 per lb, on year-end profit-taking, dealers said.
ICE March arabica coffee futures dropped 3.35 cents to settle at $2.3630 per lb. The spot contract was on track finish the year up more than 70 percent, its biggest percentage gain since 1994. Cocoa futures fell as concerns over the supply pipeline from top grower Ivory Coast eased in holiday-thinned volumes despite a disputed election in Ivory Coast. ICE March cocoa fell $65 to settle at $3,000 per tonne, in an inside day. The spot contract was on track to see its first weak annual performance in five years ahead of the last trading day of 2010 Friday.