Sugar, Coffee Decline on Europe’s Debt Crisis
Sugar and coffee fell in London, paring last week’s gains, as concern about Europe’s debt crisis prompted some investors to spurn risk. Cocoa advanced.
A rollover plan for Greece serving as the basis for talks between investors and governments aimed at averting a debt default would qualify as a distressed exchange and prompt a “selective default” grade, Standard & Poor’s said today. German and U.K. government bonds rose.
“News that a rollover plan would be labeled a default has prompted concerns in the financial markets, and this is bleeding into the commodity markets,” Keith Flury, an analyst at Rabobank International in London, said in an e-mail today.
White, or refined, sugar for October delivery slid $4.10, or 0.6 percent, to $697.60 a metric ton by the close on NYSE Liffe in London. Robusta coffee for September delivery dropped $6, or 0.2 percent, to $2,466 a ton after declining as much as 0.9 percent.
“While sugar and coffee have been able to rally in the past month despite lower outside markets and macro fears, the support from the U.S. exchanges is lacking today and the European agricultural markets don’t seem to be able to ignore the sovereign debt issues in their own backyards,” Flury said.
Coffee had climbed 3 percent in a month in New York at the close on July 1, and sugar had advanced 21 percent.
China will auction 250,000 tons of sugar from state reserves on July 6, industry website sugarinfo.net said today, citing a statement from the National Development and Reform Commission. The minimum bid will be 4,000 yuan ($621) a ton, it said.
Cocoa for September delivery rose 11 pounds, or 0.6 percent, to 2,003 pounds ($3,223) a ton on NYSE Liffe, gaining for a sixth session.
Indonesia’s cocoa exports from Sulawesi, the main producing region, rose to 15,233 tons in June from 15,099 tons a month earlier, the Indonesian Cocoa Association said today.
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