Cocoa futures traded around 2-year highs on Tuesday, supported by better-than-expected demand, whereas sugar futures reversed off a nine-month high hit earlier in the session and robusta coffee futures also eased. Cocoa futures on the London and New York markets extended gains, with March cocoa on Liffe up 32 pounds or 1.8 percent at 1,772 pounds a tonne at 1443 GMT, its highest level since September 30 2011.
"We've seen buying underpinning the market all day today in London. New York has run up on a short-covering splurge," a London-based broker said. Dealers are awaiting North America's third-quarter cocoa grind data, due on Thursday, which is expected to show an increase versus a year earlier, reflecting improved demand. One European analyst estimated the data would show between a 5 and 10 percent rise in grindings.
"Most people seem to be expecting around 10 percent up," said the analyst. Elsewhere, top cocoa growing region West Africa has surprised to the upside with its grindings, showing larger than expected cocoa product exports, the analyst said. "The big surprise is West Africa and how strong it's grindings have been," the analyst added. ICE December cocoa rose $50 or 1.8 percent to $2,763 per tonne. ICE March raw sugar futures were unable to hold gains made earlier in the session, falling 0.34 cent or 1.8 percent to 18.71 cents a lb, having touched a nine-month high of 19.15 cents a lb earlier.
Jonathan Kingsman, head of agriculture at data provider Platts, said the market was due a correction and the reversal may have been triggered by selling from India. December white sugar on Liffe was $7.50 or 1.5 percent lower at $500.60 a tonne. In coffee, Liffe January robusta futures were down $34 or 2 percent at $1,687 a tonne, still above a three-year low of $1,596 hit on September 27. December arabica coffee futures on ICE edged down 0.45 cent, or 0.4 percent, to $1.1655 per lb. The front month had dipped to $1.1105 on September 17, a more than four-year low, on surplus supplies.