Liffe cocoa and sugar higher

Liffe May cocoa ends 2 pounds higher at 1,998 pounds a tonne, underpinned by concerns over risks to supplies from top producer Ivory Coast after a disputed November 28 election. Liffe March white sugar ends $7.40 higher at $798.10 per tonne, supported by tightening supplies following adverse weather in several key producing countries.
Liffe March robusta coffee ends $4 higher at $1,990 per tonne supported by ICE arabica futures which traded at close to the highest levels in more than 13 years. Trading volume in the New York soft commodity markets was light as most trading desks emptied for the Christmas and New Year holidays.
"We can expect a full two weeks of the silly season (in the soft commodity markets)," said Sterling Smith, an analyst for brokers Country Hedging Inc in Minnesota, referring to trading conditions this week and next. While trading will be choppy in the short term, soft commodities will have a bullish cast heading into 2011 given tight supplies of high-quality arabicas and political upheaval in Ivory Coast, Smith said.
New York's March raw sugar contract gained 0.46 cent to end at 32.96 cents per lb after hitting a fresh 30-year high of 33.50 cents. London's March white sugar futures rose $7.40 to conclude at $798.10 per tonne, having hit a session top of $809.60. But volume in the raw sugar market in New York was about 61,700 lots, about 40 percent below the 30-day average, Thomson Reuters preliminary data showed.
"The latest rally comes in the teeth of dollar strength and reflects the continuing perception of nearby tightness," said Thomas Kujawa of broker Sucden Financial. India remained a bullish market factor, especially with uncertainty plaguing how much sugar it will export into 2011. "It seems India will take its time on deciding on exports, and even when the decision is made, allocations of export licenses to each mill will take even longer," Kudawa said.
Sugar dealers said persistent rainfall in Australia and a modest export flow from India, the world's second-largest producer after Brazil, supported prices, with fund buying pushing ICE raw sugar to a new 30-year high. The cocoa market remained focused on the battle between rival presidential claimants in Ivory Coast for control of the cocoa-growing country.
Supporters of Ivory Coast's Laurent Gbagbo have vowed to fight to the death to keep him as president as pressure grows for him to quit, and his rival's camp urged the UN to do more to protect civilians. The key March cocoa contract in New York rose $7 to finish at $2,958 per tonne. London's March cocoa futures added 4 pounds to close at 1,987 pounds per tonne.
Coffee prices came off 13-1/2 year highs, but problems in Colombia's coffee sector should continue to prop up prices. The March arabica coffee contract on ICE Futures US eased 0.65 cent to close at $2.2465 per lb. London's March robusta coffee futures rose $4 to end at $1,990 per tonne.
Volume for both coffee and cocoa were running at 40 to 50 percent below their 30-day averages, Reuters data showed. Kona Haque, an analyst at Macquarie Bank, said "poor crop investment, rising costs, access to labour and urbanisation are some of the more long-term factors at play that are hindering stronger output growth from Colombia and Central America."