Liffe August white sugar closes $20.40 higher at $633.00 a tonne on Wednesday, supported by a slow start to the centre-south Brazilian harvest and the growing build up of ships in the top producer. Liffe July robusta coffee ended $39 higher at $2,531 a tonne with the coffee market starting to rebound following the recent downward correction in prices.
Liffe September cocoa ends 12 pounds higher at 1,892 pounds a tonne. Market supported by gains in other commodity markets although the prospect of more forward sales by Ghana helped to limit gains. The number of ships loading, waiting or arriving to export sugar from Brazil's two main ports is growing and should let up in the coming days, shipping agencies said.
Dealers said although the port congestion was a concern, the longer term outlook for sugar prices remained bearish due to improving supply prospects. "We continue to believe that sufficient supply will emerge eventually and this will take values back down to near the 20 cents level, shipping concerns out of Brazil notwithstanding," Nick Penny of Sucden Financial Sugar said.
Arabica coffee futures surged over 3 percent before paring gains, a correction higher after the sharp fall in commodity markets earlier this month. "The market was oversold and now is trying to correct itself but it's very thin volumes," a London-based broker said. Until May, commodities had been in an uptrend for 9 straight months.
Dealers said the arabica market remained underpinned by a shortage of high quality beans after key producer Colombia saw lower than average production for several consecutive crops. Colombia's coffee federation said it would maintain its forecast for 2011 production at between 9 million and 9.5 million 60-kg bags despite torrential rains that have battered coffee farms for months.