~:Sugar Recovers After Slide, Cocoa Slips:~

19 September 2011

LONDON - ICE raw sugar futures bounced on Monday as the market readjusted to Friday’s sharp sell-off, while cocoa and arabica coffee futures fell pressured by a strengthening dollar.

Raw sugar futures on ICE jumped as the market consolidated after its biggest one-day slide in six months on Friday, with dealers focusing on talk that a Brazilian analyst had raised its 2011/12 centre-south Brazilian output forecast.

“It’s a bit of a bounce after Friday’s sharp losses,” said James Kirkup, head of sugar brokerage at ABN AMRO Markets (UK) Ltd.

“The supporting element in the market is the end-user,” Kirkup added, referring to reports of weekend physical offtake to take advantage of the slide in prices on Friday.

Egypt’s state-owned Sugar and Integrated Industries Company (SIIC) said on Monday it has bought 30,000 tonnes of raw sugar for October shipment.

Prospects for large northern hemisphere crops in the fourth quarter, notably in Russia, Ukraine and EU countries, as well as substantial exports from India, the world’s number 2 producer after Brazil, capped the upside of raw sugar futures.

ICE October raw sugar futures were up 0.23 cent or 0.8 percent at 27.75 cents a lb with March up 0.19 cent or 0.7 percent at 26.50 cents at 1118 GMT.

December white sugar futures on Liffe fell $4.0 or 0.6 percent to $683.20 a tonne in thin volume of 1,101 lots.

“We do not expect sugar prices to fall much further for the time being, as the fundamental data do justify prices at their current level,” Commerzbank said in a market report.

Courtesy: Reuters