Liffe November robusta coffee settled $137 lower at $1,640 per tonne on Tuesday as fund selling, triggering a similar fall in ICE arabicas after arabica coffee hit a near 13-year high on Monday. Liffe October white sugar futures ended $7.90 lower at $569.90 per tonne. Weaker outside markets including oil and equities weigh.
Liffe December cocoa ended 10 pounds lower at 2,005 pounds a tonne. Dealers noted front-month premium was steady after widening at the start of the week, fuelling concerns about potential tightness in available supplies to tender against September.
"You've got a big collapse on everything. It is not really directly on softs....Everybody is going out of risky assets," said Romain Lathiere, fund manager with Diapason Commodities Management. Lathiere said funds have built long positions on both arabica coffee and sugar during run-up in prices during the last few weeks.
"If you look at coffee and sugar we are near the highs for many months so there was a huge (fund) long position in futures. People (funds) are going out quite quickly and until these (economic) fears disappear everything will continue to go down."
Dealers said strong Vietnamese robusta exports were a background influence but not a key driving force behind the decline in prices on Tuesday. "There has been good availability from Vietnam for sure but that's a background factor, it's certainly not caused the move today. Almost certainly this move is on how funds have positioned themselves in the market," a London-based analyst said.
"The market broke through technical levels and it's not seeing much industry support." Vietnam's coffee exports in August jumped 57.4 percent from the same month last year to an estimated 85,000 tonnes, or 1.42 million bags, the government said on Tuesday.