Liffe May white sugar falls $12.50 to close at $687.90 a tonne on Wednesday. An improving supply outlook has contributed to recent setback in prices after India allowed 500,000 tonnes of unrestricted exports and the Thai harvest exceeded expectations.
Liffe July cocoa ends 4 pounds higher at 2,089 pounds a tonne. Market boosted by weakness of sterling after the UK government cut its growth forecasts. Liffe May robusta coffee ends $31 lower at $2,538 a tonne. Market weighed down by setback in ICE arabicas driven by bearish charts and a firmer dollar.
The strong US dollar added pressure to the soft commodity complex, which saw thin dealings. The euro fell on concerns a political crisis in debt-ridden Portugal could force the government to seek aid, though losses in the single currency should be limited amid expectations of rising euro zone interest rates.
Dealers said the setback in arabica coffee was largely driven by technical indicators, after the benchmark contract was unable to break through the key $2.83 support level. "The recent drop is more technical and related to macroeconomics with the Japan crisis seeing investors being more risk averse," said Stefan Uhlenbrock, analyst at F.O. Licht.
"I would expect prices will start rising again after the Japanese and Libyan crises settle because (2011/12) crop forecasts will not be adequate to meet demand." "There may be a supply response. These high prices may result in farmers taking better care of their established trees, but I don't see an immediate response in terms of trees being planted," Uhlenbrock said, referring to coffee. Cocoa futures eased, but losses were limited by conflict in Ivory Coast, with supplies from the West African country limited by an export ban, EU sanctions and a crippled banking system. "The stocks in Europe continue to dwindle. The longer things persist, the more critical it becomes," a London-based broker said, adding the escalation of violence was a concern.