Liffe May white sugar falls $21.80 to close at $735.70 a tonne on Friday. Supply concerns appeared to be easing with a strong Thai crush and the imminent start of cane harvesting in the centre-south of Brazil. Liffe May cocoa ends off 56 pounds at 2,340 pounds a tonne, having earlier touched a seven-month high of 2,425 pounds. Dealers continued to eye conflict in top grower Ivory Coast.
There was comparative calm on Friday after a week of clashes, which had brought to country close to civil war. Liffe May robusta coffee ends up $8 at $2,390 a tonne. Dealers noted a reluctance of farmers in top robusta producer Vietnam to honour contracts after domestic prices rallied to an all-time high.
"It (looks like) a sell program hit agri commodities," said Nick Gentile, the head of trading operations in commodity firm Atlantic Capital Advisors. "They're selling the complex, (and) it could be profit-taking." Another dealer said: "It looks like one of these funds decided they wanted to short the market going into the weekend and dumped their positions across the board. There is really no news out there that triggered it. In fact, there has been no change in the bullish fundamentals for cocoa, sugar and coffee at this time."
The impact on the cocoa market was not as harsh and that may be because of the daily gunbattles in Ivory Coast and the virtual state of civil war in a country, which accounts for 40 percent of world supplies of cocoa beans. "People believe the mid crop could be disrupted," said Keith Flury, a senior analyst with Rabobank in London. Constraints on bank liquidity and security fears could also dissuade Ivorian growers from harvesting, dealers said. Both the spot London and New York March cocoa futures contracts traded at premiums over May, an indication of the fear that supplies of Ivorian cocoa may come to a halt due to the fighting there.