:. Food Industry News


Coffee, Sugar Fall on Grim Economic Outlook

Source: Reuters
13/11/2008

London, Nov 13 - Coffee and sugar futures eased early on Thursday with a weaker commodity complex, and more grim economic news pointed to further price weakness.

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A weakening of the pound to a new 12-year low underpinned London cocoa, with attention focused on the recent slow arrival of new crop beans to ports in top producer Ivory Coast.

Sugar was the loss leader among the softs.

"It's the same story -- the dollar and oil are the key factors," one trader said, and referred to light trade buying.

"It's small-time players (investors) playing around with the market. It's (negative) sentiment. There's further downside ahead."

Oil dropped to a 22-month low under $55 on Thursday as evidence piled up global recession would have a deep impact on demand and news OPEC might take more emergency action did only a little to halt the sell-off.

ICE March raw sugar was down 0.17 cent or 1.5 percent to 11.44 cents per lb at 1221 GMT.

December white sugar was down $4.6 or 1.5 percent to $306.0 per tonne in slim volume of 475 lots. Most-active March was down $1.6 to $319.90, and dealers said it could fall below $310.0. December expires on Friday.

Robusta and arabica futures were little changed, pressured by lower commodities, notably oil, in light of disappointing economic news, with Germany falling into recession and China industry output growth dropping to its lowest in seven years.

January robustas were down $18 or 1 percent to $1,807 per tonne in slim volume of 1,958 lots at 1227 GMT.

ICE March arabicas were up 0.05 cent or 0.04 percent to $1.1645 per lb.

Brazil, the world's biggest coffee exporter, will export 27-28 million 60-kg bags in 2008/09, less than earlier expected, a senior industry executive said on Wednesday.

London cocoa futures edged up on support from the weak pound.

Sterling hit its lowest against a basket of currencies in more than 12 years on Thursday, dragged down by broad pound weakness on expectations that a suffering UK economy will translate into more interest rate cuts.

London March cocoa was up 1 pound to 1,323 pounds in thin volume of 957 lots at 1233 GMT, while benchmark ICE March cocoa futures were $9 weaker at $1,918 per tonne.



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