Liffe July cocoa pared gains to end 21 pounds higher at 1,910 pounds a tonne on Monday, after earlier peaking at 1,938 pounds a tonne. The outlook for the resumption of exports from top producer Ivory Coast improved with the arrest of Laurent Gbagbo. Liffe May white sugar rose $3.50 to close at $703.20 a tonne. News of increased US import quotas boosted sugar markets.
Liffe July robusta coffee ended down $21 at $2,426 a tonne, as a weaker tone on ICE dragged the London market lower. The United Nations confirmed Monday that Ivory Coast's Laurent Gbagbo had surrendered to the forces of presidential claimant Alassane Ouattara and is being held by them. "Things seem to be moving fast. The EU is moving on the sanctions front and there are reports that shipments are to move soon," Keith Flury, senior analyst at Rabobank said.
"They've arrested Gbagbo, but it doesn't mean the situation is now improved," Jack Scoville, an analyst for brokers The Price Group, said. "They will start (exporting cocoa), but it will be a while before they get it out." Sterling Smith, analyst for Country Hedging in Minnesota, said the market could see a short-covering bounce for the next four to five sessions following the arrest of Ivorian presidential incumbent Laurent Gbagbo.
Long-term, however, the market is bearish due to the expectation for a surplus and as the risk premium is expected to be taken out, Smith said. "Many feel bearish but i do not think cocoa will fall out of bed from here. We need to see what happens in Abidjan, and the west in the days and weeks ahead," one cocoa dealer said.
A unit of Danish shipping and oil group A.P Moller-Maersk hopes to make its first call to Ivory Coast's Abidjan port this week since sanctions were lifted by the European Union, the company said on Monday. Exports of stocks held at Abidjan and San Pedro should start quite quickly as the ports are secure, cocoa dealers said. "We just need to get machinery back in there to move the containers around, which should take a week, and then get vessels booked and moved in," a dealer at an international trade house said, adding that purchasing cocoa could be trickier.
Sugar futures were boosted by news that the USDA had increased its sugar import quota to 1,556,497 short tons (raw value) for fiscal 2011 by reassigning 325,000 short tons originally allocated to domestic producers. "That's why we rebounded," said Mike McDougall, senior vice-president of brokerage Newedge in New York, regarding the rise in the raw sugar market.
Traders said that Mexico will probably supply a chunk of the sugar, especially since the country will export a record 1.3 million tonnes in 2010/11 due to strong demand from the United States. They said some of the TRQ countries may not be in a position to supply the sugar. Some new-crop Brazilians may be part of increased shipment of sugar along with possibly Australia. "It's going to come from all over the place," one said.