Liffe March white sugar ended $65.10 lower at $761.30 per tonne on Thursday, underpinned by tight global supplies due to adverse weather in key producing countries. Dealers noted that cash demand was scarce at current high prices. Liffe May cocoa ended 29 pounds lower at 2,034 pounds ($3,140) a tonne as concerns over supplies from Ivory Coast ease, despite a power struggle following a disputed election on Nov. 28.
Liffe January robusta coffee ended $60 higher at $2,084 per tonne, buoyed by a delayed harvest in top producer Vietnam. Earlier, robusta coffee futures touched a 2-1/4-year high on Thursday, underpinned by a delayed Vietnamese harvest. "The harvest in Vietnam is ongoing and should be finished soon," said Andrea Thompson, an analyst at CoffeeNetwork, adding that output was expected to be around 20 million 60-kg bags, in line with the previous crop.
Vietnam's coffee harvest, which runs from October to January, was delayed by unseasonal rains. "Quality is the primary concern rather than quantity," Thompson said, noting that the market won't get an update on quality until the beans begin reaching the market in January. Physical demand is expected to decline due to the current high prices, senior trade sources said. "We expect some demand destruction," said Alan Wood, managing director of London-based merchant Czarnikow.
Wood said he expected the raw sugar market to be well supported before expiry of the ICE March raw sugar futures contract on Feb. 28 due to tight supplies and low inventories. "There is every chance that we will see new highs," he said. Cocoa futures edged lower in holiday-thinned volumes as concerns eased that a disputed election in top producer Ivory Coast could disrupt supplies to the international market.
"This political strife initially injected some premium into the market. That is still there, and if this situation is able to be resolved in any kind of real fashion, then prices should be able to come down because there is really a lot of supply," said Keith Flury, a senior commodity analyst with Rabobank.
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