Liffe May cocoa ended 12 pounds higher at 1,948 pounds a tonne on Monday. Industry buying emerged to stem the fall after prices earlier slid to a four-week low. Supply risk premium for political tensions in Ivory Coast has, however, eroded. Liffe March white sugar ended $10.40 higher at $775.50 per tonne. Market's focus on the outlook for exports in India with uncertainty whether anticipated shipments will proceed and if so when.
Liffe March robusta coffee was last at $2,055 a tonne, up $32 on the day, supported by gains in ICE arabicas. Dealers said the market had earlier been weighed by hedge selling as supplies flowed out of West Africa despite ongoing political tensions in Ivory Coast.
"We have come off a long way from the highs and I think we are running into industry buying now," one London dealer said. Dealers said the risk premium built into cocoa prices in the aftermath of the disputed presidential election in top grower Ivory Coast had, however, gradually been eroded.
"There was a lot of risk premium injected into the market as soon as things started escalating but at the same time we have weekly reports showing (port) arrivals are fine. I think that has taken a lot of premium out of the market," said Keith Flury, a senior commodity analyst with Rabobank.
Cocoa arrivals to Ivory Coast ports have broadly kept pace with last year's volumes, though they are slightly lower this week after a bout of unrest and temporary lags in the season's cycle. India still has plans in place to export 500,000 tonnes of sugar, but the government will be cautious in allowing farm exports due to high food inflation, Farm Minister Sharad Pawar told reporters on Monday.
"India is the key to the deficit in sugar that we've got in raws," a London-based commodities trader said. "That's why this decision on what the Indians do with their sugar is pretty key to what the market does." Another trader said some index funds were cutting their exposure to sugar as part of rebalancing, pushing the price lower. March raws fell 0.29 cent or about 0.9 percent to 31.24 cents a lb.
Comments
Comments are closed for this article.