Liffe cocoa surges

Liffe July cocoa ended 10 pounds higher at 1,921 pounds a tonne on Wednesday as prices consolidated following recent losses. Dealers eyed developments in top producer Ivory Coast where the political conflict appeared close to a conclusion. Liffe July robusta coffee ended $9 lower at $2,389 a tonne on technical selling, based on long term price charts.
Liffe May white sugar falls $16.50 to close at $705.80 a tonne as light volumes of activity made the market vulnerable to sharp moves. Tuesday's optimism for a near-term resumption of cocoa exports dimmed as forces loyal to Ivory Coast presidential claimant Alassane Ouattara launched a heavy attack on Wednesday on the bunker where Laurent Gbagbo was defying efforts to force him to cede power, residents said.
Coffee and sugar markets were weak. "It's a combination of profit-taking and a short covering rally and Gbagbo still has not formally accepted surrender terms imposed by Ouattara and the UN," said one veteran cocoa dealer in New York. A slower return to normal business activities than the market had expected in Ivory Coast and a weaker US dollar also helped lift prices, he said.
Negotiations led by the United Nations and France aimed at securing the departure of Gbagbo have failed, French Foreign Minister Alain Juppe said, although the conflict was believed to be near a conclusion by many within the cocoa industry. The market has stabilised after the July contract fell to $2,940 on Friday, the lowest level for the second month since mid-January, and remains about 20 percent below a 32-year peak set in early March at $3,775 per tonne. Prices rose early last month as the conflict and related European Union sanctions kept exports from Ivory Coast to a virtual standstill, leaving an estimated 450,000 tonnes sitting in warehouses in the world's top grower.
Jonathan Parkman, joint head of agriculture at Marex Financial, told Reuters Insider on Wednesday 100,000-150,000 tonnes of the cocoa was unhedged and this could have a bigger impact on prices than the resumption of shipments. Sugar futures reeled from investor liquidation, spread trade and arriving supplies from the harvest in important center-south region of top grower Brazil.