London robusta coffee and cocoa futures posted solid gains on Wednesday, moving back towards recent multi-year highs despite the closure of US markets, which kept volumes limited, traders said. Sugar prices also firmed, within their recent range, supported by mild trade and speculative buying, they added.
Cocoa prices remained firmly in their uptrend, getting within a few pounds of the fresh four-year peak scored on Monday after news last week of a rocket attack on Ivorian Prime Minister Guillaume Soro, who escaped unhurt. September closed up 18 pounds at 1,119 pounds a tonne, just off the day's high and near Monday's peak at 1,122 pounds.
Traders noted pockets of trade buying on the dips, keeping the market well supported, and said the Ivorian news had also put the political situation in the country back into focus. There were also some concerns over rainfall in Ivory Coast away from the main cocoa growing regions. "The main concern is the Ivory Coast crop," one analyst with a Western trade house said.
"In the principal growing regions, rainfall is close to normal, but it's in some parts of the rest of the country where rainfall has been generally poor," the analyst added, referring to concerns over the outlook for the main crop.
Cocoa futures had been rising before the rocket attack on Ivorian Prime Minister Guillaume Soro on Friday, and then picked up momentum, traders said. "It (attack) added fuel to what was already a smouldering fire," the analyst said.
Cameroon's Cocoa and Coffee Interprofessional Board (CCIB) expects output to reach around 180,000 tonnes in the 2006/07 season ending in August, from 164,301 tonnes last year, a board official said on Wednesday.
COFFEE FIRM: Robusta prices also put in a strong performance, albeit in a thin total volume of less than 5,000 lots. September settled up $22 at $1,909 per tonne and the market looked poised for a retest of the recent nine-year high of $1,945 a tonne, second position, reached against the backdrop of tight supplies and robust global demand.
Dealers saw support for September in the $1,840 zone, adding that a break over $1,945 was key to bringing $2,000 into sight. However, traders also cited the large long position held by funds in the London market and how this made it vulnerable to a sudden correction.
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