London benchmark October white sugar futures surged to new contract highs on fund buying and closed up 3.12 percent on Tuesday, traders said. Front month October settled up $9.40 at $311.00 per tonne in volume of 11,802 lots, after trading from $304.00 to $311.10.
December concluded up $8.20 at $293.50 per tonne in volume of 4,344 lots, having moved from $288.20 to $294.00.
"The market is fund driven. Funds started the push," one trader said after October hit a series of new contract highs up to $311.10. "Funds have got to roll out of their October position," the trader added, noting October's expiry on September 15.
Iran slashed private sector sugar import tariffs to 50 percent from 150 percent to stimulate buying and lower the price of the sweetener in the domestic market, a senior commerce ministry official said on Saturday.
Syria's General Foreign Trade Organisation (Geza) bought 13,000 tonnes of raw sugar at $310.30 per tonne and is seeking another 52,000 tonnes of both white and raw sugar, an official said on Sunday.
COFFEE HIGHER: London coffee futures closed higher on speculative buying on Tuesday, reversing earlier losses driven by fund selling, and appeared to shrug off potential hurricane-related damage to US warehouses, traders said.
September settled up $14 at $920 per tonne in volume of 10,819 lots, after trading from $920 to $890.
November concluded up $14 at $952 per tonne in volume of 16,665 lots, having moved from $952 to $921.
Traders noted fund selling had dragged down London robusta futures for much of the session as the market nervously eyed the impact of Hurricane Katrina.
"We're guided entirely by the United States," one trader said, referring to potential hurricane damage to warehouses.
NYBOT declared a force majeure for its certified coffee stocks warehoused in New Orleans, affecting about 16 percent of the exchange's total stocks.
In a statement the exchange said that effective August 30 "no further delivery notices may be issued for coffee to be delivered in the Port of New Orleans until the conditions of the warehouses and the coffee located there can be determined."
About 1.6 million 60-kg bags of green coffee are held in New Orleans, accounting for about 27 percent of total green coffee in the United States, according to recent data from Green Coffee Association Inc.
COCOA EASIER: London cocoa futures closed slightly weaker on Tuesday and at the lower end of its recent range, with activity largely structural, traders said.
September settled down one pound at 820 pounds in volume of 2,608 pounds, having moved from 824 to 816 pounds.
December concluded down three pounds at 827 pounds in volume of 4,062 lots, after trading from 831 to 822 pounds.
"Despite weaker sterling, the market is not playing ball - and should be higher," one trader said.
"Activity is largely AAs (Against Actuals - a form of hedging) and September-December spreads."
Traders said the latest worries over security in Ivory Coast did not appear to be having any effect on cocoa futures.
South Africa said on Tuesday it would tell the UN Security Council that it had concluded its mediation in the Ivory Coast, blaming the rebels and the political opposition for deadlock in the peace process.