May white sugar traded around 6-month lows, ending $19.80 lower at $521.40 on Tuesday after a bout of investor long liquidation. Dealers talked of a lack of physical offtake despite the recent slide in prices. May cocoa on Liffe ended 14 pounds lower at 2,187 pounds a tonne due to investor long liquidation, as traders focused on expires of ICE and Liffe contracts.
May robusta coffee finished $6 higher at $1,231 per tonne. Dealers said ample supply from top producer Vietnam weighed on prices. Earlier, raw sugar futures on ICE edged down as the market kept sight of a seven-month low hit early last week, weighed by a lack of physical offtake.
Cocoa on ICE fell on long liquidation with the market's short-term focus on Tuesday's expires of March positions on both ICE and Liffe, while robusta coffee prices were little changed with worries over defaults discouraging activity. Swiss chocolatier Lindt & Spruengli is confident its strong brand and recent investment will restore growth to long-term levels, after subdued consumer demand and high cocoa prices hit 2009 profit.
Sugar futures risked falling further as the world's sugar deficit eased and due to a lack of willingness by physical buyers to acquire supplies at current prices, dealers said. They also talked of hefty new crop supplies expected from the centre-south growing region of top sugar producer Brazil from April, and expectations of a good monsoon in number 2 producer India.
"Maybe we've got to have more pain before we get any gain," said David Sadler, a senior sugar futures trader. "I'm guessing that the next support level (in raw sugar) could be in the band of support that we had previously of around 17.0-18.50 cents a lb." Cocoa futures fell under pressure from long investor liquidation as the market focused on expires in the Liffe and ICE markets, dealers said.
"There is talk of options-related selling in the mid months and I heard that (number 2 producer) Ghana was a seller yesterday," one London-based cocoa futures dealer said. Coffee futures were little changed in thin volumes, with concerns over defaults in robustas discouraging activity, dealers said. Low selling by Vietnamese farmers dissatisfied with current low robusta futures created concern about possible defaults on past coffee contracts. "We are seeing a drawdown in stocks," one robusta coffee futures dealer said. Dealers said the market eyed Monday's contract low of $1,212 per tonne in Liffe May. "The potential at $1,212 or $1,200 is to trigger more sell stops," a dealer said.
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