October white sugar on Liffe fell $7.40, or 1 percent, to $770 per tonne on Monday, having touched a contract high of $821.00 on July 25. Earlier, ICE raw sugar and cocoa futures reversed lower on Monday on spillover pressure from weak US manufacturing data, while coffee prices firmed on roaster nibbling.
Many commodities received earlier support from a US debt deal aimed at avoiding an unprecedented default but turned lower after the June US ISM manufacturing figures dropped below forecasts to a two-year low. "There are pretty big fears about the economy going around. The manufacturing data wasn't all that strong and that seems to have hurt things," said Jack Scoville, agricultural analyst at The Price Group in Chicago. "Everybody's so ... jumpy about the latest hair trigger that it really doesn't take too much to jump out of things or pile out of things."
Further pressure came as No 2 producer India made available 1.703 million tonnes of non-levy sugar quota, higher than the 1.56 million tonnes it had released last month, in expectation of higher demand during festival season. The US Department of Agriculture allowed early entry for quota sugar, which dealers said tells the market that supplies are tight. The decision was no surprise.
The market shrugged off downward revisions in expectations for sugar output in top producer Brazil, the driver in the latest sugar futures rally. Itau BBA said it saw risks that centre-south Brazilian sugarcane output, hit by a mix of weather factors and aging plants, could come below the latest forecast by industry group Unica of 533.5 million tonnes in 2011/12.
September robusta coffee on Liffe rose $7 to $2,099 per tonne. "We had a very good run higher at the start of this year on concerns over the political situation in (top grower) Ivory Coast, and we're still retracing now," said Andrey Kryuchenkov of fund VTB Capital. London September cocoa settled up 5 pounds at 1,857 pounds per tonne, boosted by the weak sterling.