Liffe coffee ends higher

Liffe May robusta coffee ends $17 higher at $2,613 a tonne. May's premium to July widened, buoyed by tightness in available deliverable supplies. Liffe May white sugar eases $4.30 to close at $706.30 a tonne. Market weighed by improving supply prospects with the tail of the Thai crop yielding more than anticipated.
Liffe July cocoa ends 43 pounds higher at 2,051 pounds a tonne. Market continues to be underpinned by conflict in top grower Ivory Coast. Earlier in the day coffee futures rose, underpinned by tensions in the Middle East after the UN-mandated air strikes on Libya, while cocoa futures extended gains, supported by worries over supplies from Ivory Coast.
Coffee prices strengthened, with market sentiment remaining fragile due to the escalating tension in the Middle East. Coffee was also supported by low global stocks. In the robusta market, May's premium over July remained firm at $165 a tonne, supported by short-covering, dealers said.
London May robustas were up $17 or 0.7 percent to $2,613 per tonne in mild volume of 3,591 lots at 1509 GMT. London robustas were supported by a lack of selling activity on the physical market. Trade sources said a leading trade house was believed to be the major holder of exchange stocks while supplies from origin were proving hard to obtain.
"There's not a shortage, the coffee is in origin and there's still four to five weeks to ship it," a European trader said, referring to Vietnamese robusta beans. "I think this (premium) is led by fear and panic buying," said the trader.
Cocoa prices extended gains as they recovered from Friday's sell-off, remaining vulnerable to sharp moves on outside factors. London May cocoa was up 42 pounds or 2.1 percent to 2,045 pounds per tonne in moderate volume of 9,316 lots. "The turmoil in the world at the moment, in the Middle East, Japan, it's all a pretty potent brew. Anything can tip any markets any way," a London-based broker said.
"Markets are very unstable in their behaviour." Conflict in top producer Ivory Coast continued to underpin prices and fuel concerns over future global cocoa supplies.
Dealers said the small delivery on NYSE Liffe's March contract means there won't be any shortage of cocoa stocks in May. "There's sufficient stocks in Europe to satisfy the industry for now," the broker said. London May white sugar was down $4.60 or 0.7 percent at $706.00 per tonne in light volume of 1,622 lots.
Barclays Capital said in a market note: "Shorter-term logistical bottlenecks cannot be ruled out, especially in Brazil." "But supply increases look likely on indications of higher Thai production, increased 2011/12 Brazilian production and the likelihood of an expansion in sugar acreage in India, which may hasten India's decision to export after having held back from the market so far."