NEW YORK/LONDON, April 11, 2011 - Cocoa futures pared gains on Monday after Ivory Coast's defeated leader Laurent Gbagbo was arrested and the European Union lifted sanctions on the top producer's two main ports, indicating export resumption was near.
Sugar rose after the U.S. Agriculture Department authorized the imports of nearly 295,000 tonnes in fiscal 2011, while coffee prices dipped on light producer selling. New York's July cocoa contract on ICE Futures U.S. climbed $43 to finish at $3,028 per tonne. London's July cocoa futures increased 21 pounds to close at 1,910 pounds per tonne.
The United Nations said Gbagbo had surrendered to the forces of presidential claimant Alassane Ouattara, who had him in custody.
"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," said Jack Scoville, an analyst for Price Group brokers. "They will start (exporting cocoa), but it will be a while before they get it out."
Sterling Smith, an analyst for Country Hedging in Minnesota, said the market could see a short-covering bounce for the next four to five sessions in the wake of Gbagbo's arrest.
Long term, the market was bearish due to expectations for a surplus and as the risk premium was 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. Exports of stocks at Abidjan and San Pedro should start 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 UP ON U.S. IMPORT NEWS, COFFEE OFF
Sugar futures were boosted after the USDA 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, referring to the rise in the raw sugar market
New York's May raw sugar contract rose 0.38 cent to end at 26.04 cents per lb. London's May white sugar futures added $3.50 to close at $703.20 per tonne.
Traders said 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 (tariff rate quota) countries may not be in a position to supply the sugar. Some new-crop
Brazilian may be part of increased shipment of sugar along with possibly Australian. TRQ nations are permitted to export sugar to the U.S. domestic market.
"It's going to come from all over the place," one said.
Coffee prices eased, staying within a tight range as dealers said light producer selling weighed and prices remained below the 34-year high of $2.9665 a lb hit on March 9.
"We got beat up very nicely, and we came up out of it very well. I think that bodes well for the coffee market," Smith said.
New York's July arabica contract fell 0.25 cent to close at $2.776 per lb. London's July robusta contract lost $21 to close at $2,426 per tonne.
Source : reuters
