Raw sugar, cocoa and coffee prices rose on Tuesday as soft commodity markets began to recover after Monday's swine flu-inspired setback. Trading in raw sugar futures was dominated by rollover business ahead of expiry of the ICE May contract on Thursday, against a backdrop of firm market fundamentals, dealers said.
"The fact is that physical supply of sugar is tight and demand remains robust," said Nick Hungate, a soft commodities trader with Rabobank. "Sugar continues to be relatively robust and to hold up in spite of the onslaught of negative macroeconomic factors," he added, referring to worries over swine flu and the bank sector.
ICE July raw sugar was up 0.11 cent at 14.00 cents per lb at 1650 GMT, while London August white sugar futures settled $0.40 higher at $418.40 per tonne. Robusta coffee futures in London inched up with volume boosted by rolling forward of positions out of May into July, dealers said.
They noted the front month had weakened to a discount of about $22 to July, compared with a similar sized premium last week, with producers rolling forward long positions. "It may widen a bit further but I think you are now at a level where traders are happy to buy," one dealer said. Benchmark July robustas ended $1 higher at $1,471 a tonne.
Arabica futures on ICE also edged higher with the market consolidating after a sharp setback on Monday when concern about a flu outbreak sparked widespread losses in commodity markets. July arabicas were up 0.90 cent at $1.1630 per lb. Dealers noted key support around $1.14, basis July, held during Monday's setback and was again tested on Tuesday but once again was not breached.
Cocoa futures also rebounded after sliding on Monday. London July cocoa ended 16 pounds higher at 1,738 pounds per tonne. Dealers saw support in July at 1,716 pounds and resistance at 1,754 pounds. ICE July cocoa settled $23 higher at $2,404 per tonne.