NEW YORK/LONDON: Cocoa futures pared their gains Monday as the arrest of incumbent Laurent Gbagbo and the lifting of European Union sanctions on its two main ports brought top producer Ivory Coast closer to resuming cocoa exports.
Sugar rose after the US Agriculture Department said it authorized imports of nearly 295,000 tonnes in fiscal 2011 , while coffee prices dipped on light producer selling.
New York's July cocoa contract on ICE Futures US climbed $43 to finish at $3,028 per tonne. London's July cocoa futures increased 21 pounds to close at 1,910 pounds per tonne.
The United Nations confirmed Monday that Ivory Coast's Laurent Gbagbo had surrendered to the forces of presidential claimant Alassane Ouattara and is being held by them.
"Things seem to be moving fast. The EU is moving on the sanctions front and there are reports that shipments are to move soon," Keith Flury, senior analyst at Rabobank said.
"They've arrested Gbagbo, but it doesn't mean the situation is now improved," Jack Scoville, an analyst for brokers The Price Group, said. "They will start (exporting cocoa), but it will be a while before they get it out."
Sterling Smith, analyst for Country Hedging in Minnesota, said the market could see a short-covering bounce for the next four to five sessions following the arrest of Ivorian presidential incumbent Laurent Gbagbo.
Long-term, however, the market is bearish due to the expectation for a surplus and as the risk premium is expected to be taken out, Smith said.
"Many feel bearish but i do not think cocoa will fall out of bed from here. We need to see what happens in Abidjan, and the west in the days and weeks ahead," one cocoa dealer said.
A unit of Danish shipping and oil group A.P Moller-Maersk hopes to make its first call to Ivory Coast's Abidjan port this week since sanctions were lifted by the European Union, the company said on Monday.
Exports of stocks held at Abidjan and San Pedro should start quite quickly as the ports are secure, cocoa dealers said.
"We just need to get machinery back in there to move the containers around, which should take a week, and then get vessels booked and moved in," a dealer at an international trade house said, adding that purchasing cocoa could be trickier.
SUGAR UP ON US IMPORT NEWS, COFFEE OFF
Sugar futures were boosted by news that the USDA had increased its sugar import quota to 1,556,497 short tons (raw value) for fiscal 2011 by reassigning 325,000 short tons originally allocated to domestic producers.
"That's why we rebounded," said Mike McDougall, senior vice-president of brokerage Newedge in New York, regarding the rise in the raw sugar market .
New York's May raw sugar contract rose 0.30 cent to trade at 25.96 cents per lb at 12:55 p.m. EDT (1655 GMT). London's May white sugar futures added $3.50 to close at $703.20 per tonne.
Traders said that Mexico will probably supply a chunk of the sugar, especially since the country will export a record 1.3 million tonnes in 2010/11 due to strong demand from the United States.
They said some of the TRQ countries may not be in a position to supply the sugar. Some new-crop Brazilians may be part of increased shipment of sugar along with possibly Australia.
"It's going to come from all over the place," one said.
Coffee prices eased, staying within a tight range as dealers said light producer selling weighed and prices remained below the 34-year high of $2.9665 a lb hit on March 9.
"We got beat up very nicely and we came up out of it very well. I think that bodes well for the coffee market," Smith said.
New York's July arabica contract dropped 1.25 cents to trade at $2.766 per lb at 12:57 p.m. London's July robusta contract lost $21 to close at $2,426 per tonne.
Comments
Comments are closed for this article.