March white sugar ended $8.10 higher at $725.10 a tonne on Tuesday. March rallied, boosted by strong fundamentals, notably a supply crunch in Asia. May cocoa on Liffe ended 2 pounds lower at 2,282 pounds a tonne, underpinned by a slowdown in port arrivals in top producer Ivory Coast.
March robusta coffee settled $11 higher at $1,396 per tonne. Market buoyed by tight supplies of quality arabicas. Earlier, ICE raw sugar futures rallied on Tuesday, boosted by strong fundamentals, as the market recouped the prior session's losses fuelled by sales by index funds.
"I think the selling yesterday linked to the index rebalancing was vastly over-done. I think we are simply going back to where we should be based on the fundamentals," a senior analyst with a fund manager said of the rally. Jonathan Kingsman, head of the Swiss-based Kingsman SA consultancy, said the rebalancing had dragged on sugar futures.
"This is resulting in weaker closes - a period of retracement of the market," he said. "The difficulty is not knowing how long this retracement will last or how deep it will be." Kingsman said raw sugar futures were likely to challenge the psychological 30 cents a lb eventually due to the combination of tight supplies in importing countries combined with low stocks.
"We are so close to 30 cents, that I imagine we will have another stab at it at some stage," he said. Dealers said the market remained underpinned by tight supplies and strong import demand expected from top consumer India, as well as other countries such as Russia, the United States, Pakistan and Iran.
The cocoa market is focused on European fourth-quarter grind data, a measure of demand, due for release on Thursday. Ricardo Santos of the agri-commodity brokerage of BNP Paribas Fortis, said prices had consolidated before the data, which he expected to be steady or slightly down from a year ago.