March white sugar settled $11.40 higher at $736.50 a tonne on Wednesday. Market looks poised to challenge its record high for the front month of $748.00 in the near future, boosted by expected strong demand from both India and Pakistan. May cocoa on Liffe ended 7 pounds higher at 2,289 pounds a tonne. Market's next move likely to be determined by European Q4 grindings data to be issued early Thursday.
March robusta coffee settled $2 higher at $1,398 per tonne. Robustas continue to lag the more buoyant arabica market with fundamentals much less constructive. Earlier, raw sugar futures on ICE rose on Wednesday and looked poised to test a 29-year high once a bout of selling by index funds has been completed later this week. Cocoa futures were slightly higher as the market remained rangebound ahead of Thursday's Q4 European grindings data while coffee edged up on a weaker dollar.
"Once that is out of the way we think we can see prices pushing back up to have another go at the 30-cent level," said Rabobank analyst Luke Chandler. Abah Ofon, analyst at Standard Chartered Bank in Dubai, said, "There is a possibility of sugar heading higher from these levels." India has extended duty-free imports of white sugar by nine months to December 31 as it looks to cover a supply shortfall, Farm Minister Sharad Pawar said on Wednesday.
Dealers said the main short-term focus would be European Q4 2009 grindings data, due to be released early on Thursday. Fourth-quarter 2009 cocoa grinding volumes in Europe and North America, key measures of demand, are expected to show that post-recession restocking has yet to gather pace, but that picture could be rosier later this year. Dealers noted cocoa port arrivals in top producer Ivory Coast were now beginning to slow down after a strong start to the main crop season.