Liffe sugar ends lower

Liffe March white sugar fell $30.80 to close at $768.70 per tonne on Tuesday. Chinese rate rise triggers selling in softs, including sugar. Liffe May cocoa closes 23 pounds higher at 2,123 pounds a tonne. Market focused on whether turmoil in Ivory Coast - which grows a third of the world's cocoa crop - could lead to civil war or an extension of a call for a month-long cocoa export ban.
Liffe May robusta coffee ended $18 lower at $2,225 a tonne. Market consolidating just below last week's 2-1/4 year peak, underpinned by strength of ICE arabica futures. China's central bank raised its benchmark deposit rate for the second time in just over a month, sending commodity prices lower as markets worried the decision could slow domestic consumption in the world's No 2 economy. New York raw sugar futures fell as much as 5 percent after the Chinese decision, setting off automatic sell stops.
"Every commodity had a kick in the groin when the Chinese raised rates," a senior sugar futures dealer said, adding the decline gathered momentum as key support levels were breached. "Generally, commodities are under pressure due to the Chinese interest rate increase," said Mike McDougall, senior vice-president of brokerage Newedge USA in New York.
But other analysts said the initial reaction was overstated, as the rate increase was unlikely to impact Chinese growth, or demand for key staples such as sugar. "The ... fall in ICE raw sugar futures after the Chinese rate decision was a knee-jerk reaction," said James Kirkup, head of sugar brokerage at ABM Amro Markets (UK) Ltd. Cocoa futures turned positive after an initial dip on the Chinese rate hike, with markets focused on whether continued turmoil in Ivory Coast - which grows a third of the world's cocoa crop - could lead to civil war or an extension of a call for a month-long cocoa export ban.
A Reuters witness said at least two floors of Ivory Coast's Treasury building were in flames on Tuesday, although the cause for the fire remained unclear. "Anything that reflects tensions or disturbances in Ivory Coast is not ignored... and could be supportive," a London-based trader said.