Robusta coffee futures ended lower on Friday after the November contract expired with a large premium while cocoa closed higher and sugar was little changed. January robusta coffee ended $22 lower at $1,803 a tonne, reversing Thursday's gains in technical selling.
The contract has fallen sharply this month from a peak of $1,997 on November 7 but bounced off a low of $1,773 on Tuesday. November robustas went off the board on Friday at a large premium but a threatened explosion in its price was defused by intervention from Liffe, traders said.
Dealers said the holder of a large long position had been asked several days ago by the exchange to put liquidity in the market at a premium to January of no more than $500.
The front month expired at a premium of about $498. "I believe Liffe has responded quite well to the situation. If they didn't (intervene) we would have seen much more damage. The sky would have been the limit," one dealer said. An exchange spokeswoman has declined to comment on what steps were taken but told Reuters earlier this week that "our role as a recognised investment exchange is to ensure an orderly market is maintained at all times."
COCOA FIRMS: Cocoa finished higher after breaking out of its recent narrow range on the back of broad-based buying. "I think there has been some industry and fund interest on the buy side," one trader said. Dealers said there may have been some buying by funds looking to enhance the end-month value of long positions.
March ended 9 pounds higher at 979 pounds a tonne after peaking at 985 pounds, the highest for the contract since November 2. Cocoa arrivals at Ivory Coast's ports reached 413,289 tonnes between October 1 and November 25, 2007, according to data from exporters obtained by Reuters on Friday.
Ivory Coast's government will reduce levies paid on cocoa exports by up to 6 CFA francs ($0.01) per kg from the 2008/2009 season in line with a World Bank request to improve farmer income, the global lender said.
The International Cocoa Organisation (ICCO) said it had increased its estimate for the global cocoa deficit in 2006/07 to 242,000 tonnes from a previous forecast of 156,000 tonnes. Ghana has banned the overland transit of cocoa and cocoa waste from neighbouring states across its territory to stop this being used as a cover for smuggling Ghanaian beans out of the country, officials said.
Sugar prices remained in the doldrums. March whites ended unchanged at $287.70 a tonne. The contract has held between $280.10 and $292.60 this month with a large global supply glut keeping a lid on the market.
"We are in the middle of the range and we are waiting for it to break one way or the other, it should break downwards though. There is too much sugar and not enough buyers," one trader said. Pakistan has raised its duty on sugar imports to 25 percent from 15 percent and removed a 15 percent duty on sugar exports, a senior official said.