Liffe cocoa futures eased on Monday as a gloomy economic outlook, notably in the euro zone, reinforced concerns about demand prospects, while white sugar and robusta coffee futures nudged higher. ICE futures markets were closed for a US public holiday.
Dealers said last week's lower-than-expected fourth-quarter European grind had put the market on the defensive, while Malaysia reported a lower grind for both the fourth quarter and 2011. Cocoa grindings in Malaysia fell 1 pct to 299,271 tonnes in 2011 from 302,366 tonnes in 2010 because of lower figures in the last two quarters, the Malaysian Cocoa Board said on Monday.
"Malaysia's grind was slightly better than expected ... but last week's European grind was a major disappointment for the market," said Jonathan Parkman, joint head of agriculture at brokerage Marex Spectron. "However, when you look at grindings from around the world altogether, it looks reasonably positive. Ivory Coast product export numbers have been extremely good, suggesting there has been a significant increase in grindings there in the last six months," Parkman said. Liffe cocoa futures fell, with May ending down 31 pounds or more than 2 percent at 1,494 pounds a tonne.
Earlier on Monday chocolate maker Lindt & Spruengli reported 2011 organic sales growth of 6 percent, which missed expectations as demand for its products slowed considerably in debt crisis-shaken southern Europe. "Manufacturers will be able to spend a bit of money promoting their products, because cocoa ingredient prices are a fraction of what they have been in recent years, which obviously should help sales," Parkman added. Cocoa prices remained underpinned, however, by a recent sharp slowdown in top grower Ivory Coast port arrivals.
Cocoa arrivals at ports in Ivory Coast are down nearly 4 percent to around 763,000 tonnes by January 15, exporters estimated on Monday, compared with 793,772 tonnes in the same period of the previous season as dry harmattan hits farm output. "Cocoa prices will continue to be supported by the recent slowdown in Ivory Coast port arrivals and concerns over the impact of harmattan and dry weather," Barclays Capital said in a daily commodities note. White sugar futures were firm, remaining stuck inside a recent range in quiet trading.
"For the moment if (2011/12) supply and demand turn out to be as expected, we'll see a 9 million tonne surplus, so even though stocks are fairly low, especially in countries in the Middle East and Africa, there shouldn't be any lack of sugar," said a London-based dealer.
London March white sugar futures settled higher by $3.40 or 0.6 percent at $625.50 per tonne. Speculators extended a net short futures position in NYSE robusta coffee and increased net longs in cocoa and white sugar as of January 10, exchange data showed on Monday. Liffe robusta coffee futures were slightly higher as the market consolidated above a 14-month low set a week ago.
Dealers said a pick-up in Vietnamese selling ahead of the Tet/Lunar New Year holiday helped to cap gains. March robusta coffee on Liffe ended $22 or 1.2 percent higher at $1,854 a tonne. The contract hit $1,712 last week, the lowest level for the benchmark second month since October 2010. "It seems that some Vietnamese farmers decided to throw in the towel and hedge at the same time, and the market came down quite a lot," the London-based dealer said. The International Coffee Organisation on Monday raised its estimate of the global coffee crop in 2011/12 to 132.4 million 60 kg bags as Ethiopia overtook Colombia as the world's number three producer.
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