March white sugar ended $13.50 higher at $738.00 a tonne. Market supported by broad-based rebound in commodity markets after last week's steep setback and expected supply tightness over the next few months. May cocoa on Liffe ended 15 pounds higher at 2,214 pounds a tonne. Market recovered slightly from a setback last week in line with other commodity markets.
May robusta coffee finished unchanged at $1,330 per tonne after setting a new contract low of $1,310. Ample supplies keeping the market on the defensive. Earlier, raw sugar futures rose on Monday, taking advantage of calmer conditions in global economic markets to claw back some of last week's steep losses. Coffee and cocoa prices on ICE also edged up.
"Commodity prices are corks on an ocean at the moment," VM Group analyst Gary Mead said, adding upheaval in financial markets linked to eurozone sovereign debt was a more important influence on sugar at the moment than its own fundamentals. Dealers noted raw sugar had led the retreat in commodity markets late last week. "It is a tentative rebound after the brutality we saw in the last few days. We got caught up in the reverberations going around the global economy," said Rabobank soft commodity trader Nick Hungate.
March raw sugar on ICE stood 0.57 cent or 2.2 percent higher at 26.74 cents a lb at 1547 GMT, down from an early peak of 27.12 cents and about 11 percent below last week's 29-year high of 30.40 cents. Dealers said sugar market fundamentals remained constructive with estimates emerging from a sugar conference in Dubai that confirmed expectations for a large global deficit in 2009/10.
Consultancy Kingsman SA raised its forecast for the 2009/10 shortfall to 11.92 million tonnes from 8.3 million, but also projected a surplus of 3.99 million in 2010/11. Dealers said the outlook for 2010/11, however, hinged on whether India and Brazil are able to raise production significantly following disappointing crops in 2009/10. "If we get more monsoon problems in India and the crop fails to deliver the promised improvement, we are likely to see significantly higher prices," Hungate said.
Cocoa futures were little changed with the market looking to consolidate after a sharp decline last week. Dealers said industry buying had helped to underpin the market. "Industry have taken advantage of the decline in prices," one dealer said, adding manufacturers had been running with lower than normal cover prior to the setback.
Dealers noted a continued slowdown in port arrivals in Ivory Coast provided some support. Cocoa arrivals at ports in top grower Ivory Coast were estimated at around 16,000 tonnes February 1 and 7, down from 31,981 tonnes in the same week a year ago.
"I have never seen it (the London premium) this wide. From what we understand, there is a lot of poor quality (cocoa) in the States which won't be accepted in London," one dealer said. Arabica coffee futures were higher in choppy trade as the market sought to recoup some of last week's losses. "If other markets go down this week, maybe coffee will start to attract some fresh shorts and we could see New York back down to $1.25 (per lb)," one dealer said.