Liffe May cocoa ends down 56 pounds at 2,325 pounds a tonne on Tuesday, having earlier hit a fresh 7-month top of 2,389 pounds, and was later pushed lower by the ICE market after sell stops were hit. Market is supported by violence in Ivory Coast as the world's top grower moves closer to civil war. Liffe May robusta coffee ends unchanged at $2,384 a tonne. Market supported by strength in arabica market, which is underpinned by a shortage of Colombian beans.
Liffe May white sugar falls $10.40 to close at $733.40 a tonne. Expectations of a large centre/south Brazilian sugar crop, due to be harvested from April, is a main focus of the market. Soft commodity markets were largely weaker across the board, with cocoa and raw sugar on the retreat while coffee was mixed in mostly slow business.
"We're consolidating. There's a dearth of news out there," said Sterling Smith, a senior analyst for who covers a variety of commodity markets for brokers Country Hedging Inc. in Minnesota. The cocoa market was underpinned by concerns that Ivory Coast, the world's top cocoa producer, could edge into civil war, which could lead to severe supply disruptions. The trade is particularly worried whether presidential claimant Alassane Ouattara will extend a ban on cocoa exports he imposed from Jan. 24, a move that has been largely heeded by exporters.
"Political events in the country have taken a turn for the worse," said Abah Ofon, an analyst at Standard Chartered Bank. An export ban, sanctions against the country and bank closures have limited the local industry's activity. "Reports on the ground indicate that farmers are likely to abandon their mid-season crop because of lack of access to finance for the rehabilitation of their trees," Ofon said. Sugar futures slipped as the trade digested delivery of 18,748 lots or 965,000 tonnes of raw sugar against the expired March raw sugar contract.
"I would hope that, with the market pulling back, this will stimulate physical off-take," said Toby Cohen, a director of London-based trade house Czarnikow. Czarnikow on Tuesday revised up its forecast for the 2010/11 global sugar deficit to 3.7 million tonnes from its previous forecast of a deficit of 2.8 million tonnes due to adverse weather in key producing countries.