London sugar, coffee edge up

08 Nov, 2008

Sugar and coffee futures rose on Friday, aided by a softer dollar after weaker-than-expected US non-farm payrolls data, but an increasingly grim global economic outlook helped to limit gains. The dollar fell against the euro and a basket of major currencies on Friday after data showed steep US job losses in the last three months, fanning fears about a much deeper slowdown in the world's largest economy.
Sugar futures rose as trade and industry buying ran into investor and fund selling, and dealers said there was near-term downside price risk due to ample availability of the sweetener. "11.50-12.0 cents a lb is a fair price," said David Sadler, a senior sugar trader referring to benchmark front-month ICE futures.
ICE March raw sugar was up 0.31 cent or 2.6 percent to 12.16 cents a lb at 1546 GMT. London December whites rose $8.30 or 2.5 percent to $335.30 a tonne. Mauritius, one of the biggest sugar exporters to Europe from the African, Caribbean and Pacific (ACP) nations group, sent 59,831 tonnes to the European Union in September this year, industry data shows.
Tropical Storm Paloma formed in the Caribbean on Thursday and could strengthen rapidly into a hurricane on a path threatening Cuba - US forecasters. Coffee and cocoa settled into a narrow range on position-squaring ahead of the weekend. "I'm sure people are not very keen to get into new positions ahead of the weekend. Everyone is in such a conservative mindset," said Nick Hungate, a soft commodities trader with Rabobank.
Dealers said they did not expect a major rebound from the steep losses of the last couple of days. December arabica futures on ICE were up 1.15 cents or 1 percent at $1.1215 per lb at 1537 GMT. The contract had traded as high as $1.1850 on Tuesday on renewed optimism as money poured into US stocks as Americans voted for a new president.
January robustas in London edged up $16 or 1 percent to $1,744 a tonne. Dealers said origin selling, particularly from top robusta producer Vietnam, was weighing on the coffee market. Brazil exported 2.78 million 60-kg bags of green coffee in October, up 9.4 percent from 2.54 million bags in the same month a year ago - Council of Green Coffee Exporters.
Cocoa dealers talked of firm industry buying interest, with a weak pound giving support to London futures. "The near-term market outlook is sideways in general," one cocoa dealer said, referring to active industry buying of the March and May 2009 contracts. Benchmark ICE March cocoa rose $10 or 0.5 percent to $1,944 a tonne. London March cocoa stood 3 pounds firmer at 1,276 pounds a tonne at 1608 GMT.

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