Plantation: Plantation crops sustained losses last week with a combination of technical weakness in the commodities markets and due weaker fundamentals. However, coffee remained to be well supported as supply threats characterised prices, which had climbed towards multi-year highs in the international market.
Cocoa: The selloff in commodities markets washed away cocoa prices too this week. Restart of fresh shipments from Ivory Coast also deteriorated the sentiments, which helped to pull prices of cocoa down.
It was reported that Ivory Coast started its exports of Cocoa Beans. The Exports will be from the port of Abidjan, after three and a half months of a ban imposed by the President Alassane Quattara. However, exports opined that the stocks for exporting might have been affected by humidity due to the delay.
The political crisis have blocked the export almost half a million tonnes of cocoa, which is stuck in the coasts of West Africa. However, concerns regarding the political conflicts and the export of cocoa from the region still remain.
Cocoa prices for the most active May futures at the Inter-Continental Exchange (ICE) culminated the week’s trade on Friday at 3100, dropping almost 8 percent from the beginning of the week.
The traders are still of the opinion that strength still remains with cocoa as infrastructure in Ivory Coast, the largest exporter of the commodity, has been destroyed due to the political crisis in the region. They also added that the demand for cocoa is expected to rise with the fall in prices last week. (Cocoa futures expected to extend weakness)
Coffee: Coffee prices were no different to the rest of the soft commodities, and succumbed to the sell off witnessed last week. Coffee prices, however, were on its way up when the selling pressure knocked prices down. Arabica Coffee prices had hit the highest in 14 years at Inter-continental Exchange as concerns that supply will fall short to cater to the demand. Adverse weather conditions in Columbia, the second largest producer of coffee, also assist prices to climb towards fresh highs.
Nevertheless, data showed that exports of coffee increased in the first half of 2010-2011 as compared to the figures from the same time last year, according to the International Coffee Organisation (ICO).
ICO also showed that exports increased towards 2.3 million bags from the previous 1.4 million from Vietnam, the largest exporter of robusta coffee.
The most active May Coffee futures at Inter-continental Exchange slid 5.66 percent and settled at 28700 last week. (Rebound possible in the midst of supply threats)
Sugar: Sugar prices were also caught in the broad selling that engulfed the commodities market last week on concerns of economic growth. Raw sugar was seen falling 4 percent on the Thursday towards the lowest in eight months.
Thailand’s sugar output estimates were revised upwards and abundant supply of new crop from Brazil had already rendered the commodity weak, which was furthered by the general weakness in the commodities bourse. Sugar prices at the most active Jul contract at ICE finished trade at 2042, down 7.3 percent.
Indian sugar output has been robust during the first eleven months of the year 2010-2011. Data from the Indian Sugar Mills Association (ISMA) showed that output rose by 25 percent towards 22.6 million tonnes. ISMA estimated Indian sugar production to reach 25 million tonnes, slightly higher than the preliminary estimate of 24.5 million tonnes. The demand for sugar has fallen short of supply for the first time after 2 years, with demand forecasted at 22 million tonnes.
Cotton: Cotton futures were down as weak fundamentals and selling pressure in commodities weighed the sentiments down. Cotton futures at New York fell towards three month lows due to the idea that farmers will plant more this year than forecasts by the government of US, which is the world biggest exporter. The farmers in US said that they will be planting 12.566 million, which is 15 percent higher that of 2010.
Speculation that monetary tightening in China, the largest consumer of the commodity, also helped pull prices down last week. Chinese customs data pointed out that cotton imports during the month of March fell 15 percent, as compared to the same time last year.
Most active May Cotton futures fell towards 17300, down over 10 percent, during last week at the Inter-continental Exchange.
Rubber: Rubber prices were also no different and fell last week, with additional pressure from the news of higher supplies of the commodity. Rainfall in the major producing areas of Kerala has improved seem to have jump started the production of the commodity. Spot rubber prices were seen falling around Rs. 4 per kg from last week.
However, the demand for rubber remains to be strong. The Association of Natural Rubber Producing Countries (ANRPC) reported that China’s imports of rubber has risen 1.4 percent towards 297,000 tonnes this March after two consecutive months of import declines.
In a broader sense, the global economic concerns are also likely to cap gains in the commodity, in addition to the recent rainfalls in Kerala that gave rise to speculation that supply will rise.
Figures of ANRPC showed that member countries production is expected to reach 651,000 tonnes in April and 753,000 tonnes in May. Whereas, second quarter production is expected to increase 10.5 percent to 2.3 million tonnes.
Spot prices of rubber fell towards 227.50 a kilogram and May futures of RSS4 rubber ended at 224.60, recorded at National Multi Commodity Exchange.