Sugar and coffee futures eased on Thursday as a stronger dollar and fund selling linked to concerns about slowing global economic growth kept prices under pressure. Dealers said the weakness mirrored similar trends in other commodity markets with crude oil, grains and base metals also registering significant losses. "Speculators don't want to be in risky assets in case the European (debt) situation gets out of control," Macquarie analyst Kona Haque said.
"We seem to be in fund sell mode, and concerns on the coming weather in Brazil or perhaps further forward in Russia will be discounted," Sucden Financial said in a market update on Thursday. "It seems a more dangerous buy at the moment and perhaps a test of 27 cents is on the near term horizon," Sucden added.
Macquarie's Haque also cited slowing demand in the physical market following the recent run-up in prices. "Physical demand (for sugar) has started to ease off, refineries are complaining about high prices and importers are happy to wait for prices to come off but they come back in," she said.
October white sugar on Liffe eased $0.90 or 0.1 percent to $723.70 per tonne. "Coffee is very much following the macro uncertainty," Haque said, adding the market was also contending with more Brazilian supplies with the harvest well advanced. November robusta coffee on Liffe fell $27 or 1.3 percent to $2,099 a tonne. Cocoa futures were mixed with a stronger dollar weighing on ICE prices. December cocoa on Liffe rose 8 pounds to 1,872 pounds a tonne. "You have got origin selling above 2,000 (pounds a tonne) and industry buying around 1,850 and we're stuck (in a range)," one London dealer said.