Sugar futures climbed on Tuesday and the rest of the softs complex rose as well in mostly modest business as the market waited for direction, with the macro worries over global growth lurking in the background, analysts said. Global stocks fell and the euro slid after weak German data and eurozone growth data rekindled fears over the world economy, boosting demand for safe-haven assets like gold.
"We've had a week of drift with outside markets having undue influence and this may continue the rest of the week," said Country Hedging Inc senior analyst Sterling Smith. Sugar posted gains due to lingering concern over the smaller sugar crop in Brazil and uncertainty over how much India will really export this season given New Delhi's sensitivity to food inflation in the South Asian nation.
Volume in the New York soft commodity markets ranged from a third below the 30-day norm in sugar, nearly average in arabica coffee and almost 15 percent above the average in cocoa, Thomson Reuters data showed. London's October white sugar contract increased $12.50, to close at $748.30 a tonne. The production worries over Brazil were expected to ease in the months ahead.
Raw sugar futures have fallen by around 13 percent since hitting a contract high of 31.68 cents a lb last month on Brazil crop concerns. "Cash differentials for robusta coffee have reached all-time highs on a lack of physical supplies from origin. We believe it is only a matter of time before London futures react positively too," Macquarie bank said in a commodities note.
November robusta coffee on Liffe added $15 to settle at $2,344 per tonne. The December arabica coffee on ICE went up 5.60 cents to end at $2.55 per lb. Cocoa futures finished higher although bean values lacked clear direction due to larger-than-expected 2010/11 output from West Africa and uncertainty over 2011/12 production. December cocoa on ICE was up $58, or by 2 percent, to close at $2,989 a tonne, while Liffe December cocoa traded up 43 pounds to close at 1,896 pounds a tonne.
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