London:Whites-over-raws sugar premium loses ground

* Rollover business dominates coffee
* Whites-over-raws sugar premium loses ground

London nearby cocoa futures rose on Thursday due to a supply shortage, while coffee trade was dominated by rollover business and sugar rose buoyed by tight availability but risked falls after a contract expiry on Friday.
Dealers referred to nearby supply tightness in London cocoa, pushing up front-month values. Slow arrivals of beans to ports in top producer Ivory Coast have underpinned the market for months.

"There's a bit of concern over supply," one London cocoa trader said. "There is a lack of availability of near-term cocoa. You have to pay up."
The nearby March-May premium surged to around 70 pounds, as dealers talked of one major stock holder.

London front-month March cocoa was up 22 pounds or 1.2 percent at 1,847 pounds per tonne in moderate volume of 3,165 lots at 1555 GMT.

London May, second-month cocoa was up 3 pounds at 1,800 pounds per tonne in moderate volume of 5,330 lots.

ICE May cocoa was down $24 at $2,416 per tonne.
Chocolate exports from Germany, one of the world's leading producers, will fall an estimated 30 percent in 2009 due to the global financial crisis and devaluation of many currencies, a German cocoa trade group spokesman told Reuters on Wednesday.
In coffee, activity was dominated by rollover business in high volumes, against a backdrop of ample availability of robustas, and tightness of arabicas.

"It's mainly switches -- people who sold the March and bought the May," said one London robusta coffee dealer.

ICE May arabicas were up 0.75 cent at $1.1360 per lb at 1550 GMT, while London May robustas were up $5 at $1,582 per tonne in heavy volume of 37,734 lots, reversing earlier losses.

In sugar, dealers said talk of scaled-back output in countries such as India and China, and rising global deficit estimates, continued to underpin the market.
Commerzbank said in a market note: "Even if the market deficit is not in the double digits, the tight market situation should support a further rise in prices."

But dealers talked of the risk of a sell-off after expiry of the ICE front-month March raw sugar contract on Friday.

"We're getting towards the top end of the current range again," said David Sadler, a senior sugar futures trader, noting 13.50-13.80 cents a lb were towards the top end of the range.

"I think that after the delivery (on Friday), we may see another pullback."
One dealer said he expected a delivery of at least 350,000 tonnes against the ICE March expiry, including Central American and Brazilian sugars.

"Depending on how the spreads go, there may be more Brazils," the dealer said.
Dealers also noted the whites-over-raws premium had lost ground, suggesting plentiful availability of refined sugar.

ICE May raw sugar was up 0.44 cent at 13.62 cents per lb at 1550 GMT, while London May white sugar futures were up $7.50 or 2 percent at $399.00 per tonne.
Russia, the world's second-largest sugar importer, may cut output and consumption of sugar in the new refining season as refiners and industrial consumers face problems with funding, the main industry lobby said on Thursday.

source: reuters