:. Food Industry News


Sugar, Coffee Sideways, Eye Storm in Nicaragua

Source: Reuters
06/11/2009

Nov 6 - ICE sugar, coffee and cocoa futures were little changed on Friday as dealers awaited monthly U.S. jobless data, with coffee traders tracking the progress of tropical storm Ida in Central America.

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The U.S. jobs report, due at 1330 GMT, is expected to show a slower pace of job losses, but another rise in the unemployment rate.

Raw sugar futures remained in their wide recent 21-25 cents a lb range, dealers said.

"For now, there is support around the 22.50 cents area, but news of a far more substantial offtake is going to be needed to lift the market out of the current trading pattern," wrote David Sadler in a daily market report of brokerage Sucden.

"Otherwise, we may see the previous recent lows again being tested."

Sugar dealers were keeping a close eye on more favourable weather patterns in Brazil after heavy and persistent rains delayed harvesting in the world's top producer and exporter.

They were also tracking the outlook for Indian buying in 2009/10, with several anticipating a strong import requirement of 6-7 million tonnes that would underpin prices.

ICE March raw sugar futures were down 0.01 cent to 22.75 cents per lb at 1248 GMT, while London (Liffe) December white sugar was down $2.6 to $582.60 per tonne in modest volume of 1,047 lots.

British sugar refiner and sweetener group Tate & Lyle Plc warned on Friday of pricing pressures for U.S. corn sweeteners, its biggest single market, after reporting a 13 percent dip in first-half profits.

Brazilian ethanol has become less competitive than U.S. ethanol due to its strong currency, adverse sugarcane crop weather and millers' preference to make sugar, a senior industry consultant said.

TROPICAL STORM IDA

Coffee futures inched down as dealers tracked tropical storm Ida which hit eastern Nicaragua on Thursday, although the initial impression was that the depression was not likely to trigger a futures market reaction.

Tropical Storm Ida slammed into Nicaragua's Caribbean coast on Thursday but coffee and sugar producers in the poor Central American nation said their crops were likely to be safe from major damage.

Harvesting of arabicas has been under way in Nicaragua since October.

"The storm is a supporting factor, but volumes are very thin," one London-based dealer said.

ICE December arabica coffee futures were down 0.40 cent to $1.4170 per lb, while Liffe January robustas were down $2 to $1,443 per tonne.

Cocoa futures were steady in slim volumes, supported by a soft dollar, but upside was limited by pressure from harvests in West Africa, the world's main cocoa growing region, dealers said.

ICE December cocoa was up $8 to $3,226 per tonne, while Liffe March cocoa was up 9 pounds to 2,156 pounds per tonne in low turnover of 1,617 lots.



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