Liffe May cocoa ends up 21 pounds at 2,346 pounds a tonne on Wednesday. Market is supported by violence in Ivory Coast as the world's top grower moves closer to civil war. Liffe May robusta coffee ends down $21 at $2,363 a tonne. Market supported by strength in arabicas market, which is underpinned by a shortage of Colombian beans.
Liffe May white sugar rose $27.10 to close at $760.50 a tonne. Expectations of an ample centre/south Brazilian sugar crop, due to be harvested soon, are a main focus of the market. Sterling Smith, senior analyst for commodity brokerage Country Hedging Inc in Minnesota, said strong oil prices meant "more cane will be converted into ethanol and there will be less sugar for the market". "Sugar is tight and will remain tight for the coming quarter until Brazil, the world's largest producer, begins its harvest," Nick Penney of broker Sucden Financial said.
ED&F Man said in a monthly note on the sugar market that many analysts were projecting that sugar production from the center-south of Brazil would increase in 2011/12, compared to the 33.5 million tonnes produced in 2010/11. "Millers are expected to divert more cane to sugar production, at the expense of ethanol, in order to take advantage of the high level of world and domestic prices," the note said.
The market was also focusing on the nomination of vessels to pick up around 965,000 tonnes of Brazilian, Thai and Central American sugar to be delivered to US-based trade house Cargill against the expired March raw sugar contract. It is the largest delivery of sugar in New York since the expiration of the July contract in 2009, when 26,783 lots were delivered, totalling 1.36 million tonnes.
"The pace of nominations will be keenly monitored," said James Kirkup, head of sugar brokerage at ABN Amro (Markets) UK Ltd. The cocoa market remained focused on top producer Ivory Coast, where youth supporters of incumbent Laurent Gbagbo rampaged through the business district of Abidjan on Tuesday, pillaging shops owned by foreigners. "If there's a civil war then the (cocoa) price could go very much higher," said Gary Mead, an analyst at VM Group.
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