London sugar futures closed higher on speculative buying on Wednesday, buoyed by the New York raw sugar futures market, but traders said underlying physical business remained slack. December settled up $2.60 at $404.50 a tonne, near the top of the day's range of $405.50 to $399.70.
Total volume was 8,078 lots. The London market pushed higher in sympathy with New York raw sugar futures, bolstered by local and speculative buying, traders said.
They said underlying global physical sugar trade appeared routine and light as many importing countries, such as Russia, pressed on with domestic harvests.
The International Sugar Organisation on Wednesday raised its forecast for the world sugar surplus in 2006/07 (October/ September) to 5.8 million tonnes, up from a previous projection of 2.2 million.
COFFEE HIGHER: London robusta coffee futures closed higher on Wednesday boosted by speculative buying as the market resumed its recent upward trend after absorbing a bout of profit-taking, dealers said.
January ended up $13 at $1,608 a tonne as the market rebounded from an earlier low of $1,574. A bout of profit-taking has seen prices dip more than $60 after the second month climbed to a 7-1/2 year high of $1,636 on Tuesday.
"It is speculative buying (driving prices higher again)," one dealer said, adding renewed strength in New York arabica futures had helped to fuel buying in London.
COCOA FIRMER: London cocoa futures closed higher on follow-through speculative short covering on Wednesday, propelled by US futures, traders said.
December settled up 5 pounds at 852 pounds a tonne after touching 860 pounds, its highest in nearly seven weeks. Total volume was 14,770 lots. "There was been more spec buying and short covering," one trader said. "It is follow-through buying from yesterday."