Liffe August white sugar closes $6.80 higher at $625.30 a tonne on Friday. Market underpinned by port congestion in top producer Brazil. Liffe September cocoa ends 45 pounds lower at 1,845 pounds a tonne, with a pick-up in the pace of exports from top producer Ivory Coast keeping the market on the defensive. Liffe July robusta coffee ends $6 lower at $2,543 a tonne, dragged lower by weakness in ICE arabicas.
"The estimated 2010/11 global surplus is around 250,000 to 300,000 tonnes, which is big," said Eric Sivry, head of the agri options brokerage at Marex Financial. "There's a bit of uncertainty concerning the state of cocoa farms post conflict in Ivory Coast, but overall there are huge amounts of cocoa around, and demand is far from being stellar," added Sivry.
Thousands of cocoa farmers who fled their fields during five months of conflict in Ivory Coast are too afraid of ethnic reprisals to go home, and many fear their plantations are either looted or rotting. Cocoa arrivals at Ivorian ports are running around 13 percent above last year's levels, and deliveries are set to keep picking up, but security remains a problem up-country, exporters said on Friday.
Arabica coffee futures were lower, taking direction from outside markets, including falling oil prices. "The dollar is a bit stronger, and oil is weak and that's the main reason coffee is lower," a London-based broker said, adding there was no fresh fundamental news.
Oil fell sharply on Friday with US light crude tumbling more than $2 towards $96 per barrel as the dollar rose and investors worried about the outlook for global growth and about the health of the euro zone. "Coffee's falling on a mixture of the macro picture and technical signals," said the broker, noting the next support for ICE July arabicas was at $2.5675 a lb.
In sugar, dealers noted that the Brazilian crop size was talked down at the New York sugar industry week, which was attended by many Brazilian producers. Logistical bottlenecks at Brazilian ports were also in focus. "There are some terminals loading sugar more quickly than others," said Nick Penney of brokerage Sucden Financial. "Talk of premiums being paid by receivers to load at certain terminals abound, so the attention should really be centred around actual availability of sugar in the early part of the harvest season." Dealers said they saw strong support for ICE raw sugar futures at 20 cents a lb. Large crops expected from key producers including Brazil, India and Thailand were bearish for the price outlook.