Liffe sugar soars

Liffe March white sugar closes $25.40 higher at $824.50 per tonne on Thursday, its highest since December 30 and near the record of $835.08. The European Union said it would approve extra imports to address an expected supply shortage, and markets also focused on a possible early cut in the import duty in Russia.
Liffe May cocoa ended 1 pound higher at 2,180 pounds a tonne, well below the session high of 2,219 pounds a tonne. Cocoa prices have rallied after a month-long export ban in top grower Ivory Coast ignited concerns about global supply. Liffe March robusta coffee ended $6 lower at $2,090 a tonne in a technical consolidation and following a drop in other commodities after weak US economic data.
"The market is stronger after the news. The position on the allowing of additional imports is the most key," said Toby Cohen, head of research at London-based trade house Czarnikow. Dealers said the sale of out-of-quota sugar on the EU market was in line with expectations given the shortage of refined sugar in the bloc. Sugar futures also rose on uncertainty over whether Russia would bring forward an import duty cut, and questions over how much "open general licence" sugar India would export in 2010/11.
Russia has said it may cut its import tax on sugar to $50 from $140 a tonne beginning in March, with some analysts expecting a decision by the end of January. "If the Russian import duty cut is brought forward to March, that would be a positive story for sugar," a physical sugar trader said, adding that it would support the front month.
"We've seen more spec buying and a bit of shortcovering," a cocoa futures dealer in London said. "The Ivory Coast situation is key, due to the export ban and EU sanctions." In a further sign of disruption, cocoa exporters said a European ban on EU-registered ships doing new business at Ivory Coast's ports was delaying exports and straining storage warehouses.
"As far as prices go, the nearby contract is probably going to get a lot higher as the market is still extremely uncertain," said Keith Flury, a senior commodity strategist at Rabobank in London. Cocoa futures have rallied since presidential claimant Alassane Ouattara called for a ban on exports from Ivory Coast, which grows a third of the world's crop, in a bid to starve incumbent Laurent Gbagbo of revenues. Gbagbo has refused to cede power despite a November 28 election, which the United Nations said he lost.