Raw sugar futures rallied to their highest levels in 30 years in a pre-Christmas rally on Thursday, powered by fund buying and tight supplies, analysts said. Cocoa prices rose on fears that a civil war may erupt in Ivory Coast and disrupt bean shipments from the world's top cocoa producer, and arabica coffee rallied due to a tight supply of high-quality beans but traded well short of the new 13-1/2 year high set in the previous session.
New York's March raw sugar contract jumped 0.85 cent, or 2.57 percent, to end at a 30-year settlement high of 33.98 cents per lb. Mike McDougall, senior vice president at brokers Newedge USA in New York, said the buying "could be in anticipation of fund money" expanding their positions in commodities such as sugar in 2011.
On the year, sugar is up about 25 percent year to date in the Reuters-Jefferies commodity index, with most of the gains chalked up when the market rallied over the past month. The volume traded, though, was running below the norm. Total raw sugar dealings stood at around 66,000 lots, one-third below the 30-day average, Thomson Reuters preliminary data showed.
Cocoa futures bounded higher as worries spiked that the political deadlock in top grower Ivory Coast will descend into all-out civil war. The key March cocoa contract in New York climbed $50 to finish at $3,020 per tonne. Coffee prices were mixed, with bullish fundamentals in the arabica market keeping values buoyant although they were short of the 13-1/2 year high reached this week. The March arabica coffee contract on ICE Futures US rose 5.70 cents to finish at $2.359 per lb.
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