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London white sugar futures closed lower on continued speculator selling on Tuesday after a World Trade Organisation order to the EU to limit sugar exports by May 22, traders said. Front-month December settled down $3.50 or 1.2 percent at $279.00 per tonne in hefty volume of 3,901 lots, having moved from $275.50 to $282.00.

March concluded down $3.00 or 1.0 percent at $287.50. Total volume was 9,455 lots. Traders said selling were triggered partly by Friday's WTO order to the European Union to limit sugar sales by May 22, a date at least five weeks earlier than expected by the sugar market.

They noted the World Trade Organisation's decision could mean that the EU would have to sell some four million tonnes of "C" sugar by May 22.

"The London market is still under pressure, and could fall further. I would not buy now," one European trader said.

Another said: "I believe we are likely to see continued downward pressure, with December in a $268-282 range."

Traders said funds that had built up large long positions were now taking profits.

Egypt's Sugar and Integrated Industries Company (SIIC) wants to pay around $280 per tonne on a C&F basis for 80,000 tonnes of raw sugar, a buying official from the firm said.

COFFEE OFF SLIGHTLY: London robusta coffee ended slightly lower on Tuesday as technical weakness offset fundamental worries, traders said.

Liffe's second-month January shifted 6,517 lots and finished down $5 at the bottom of the day's range with a settlement price of $920 a tonne - the lowest since October 7 - after reports that Hurricane Beta seemed to have spared NICARAGUA'S COFFEE:

The spot November position moved 509 lots and ended $2 off at $905, also at the bottom of the session's range. Overall volume was 8,460 lots.

"I think technically the market wants to lose ground, but fundamentally the market should have strengthened as there are concerns over what is going on in Vietnam. It might drift back further," said a trader.

Vietnam said higher global oil prices this year had pushed up its production cost by 20-25 percent.

Coffee stocks have been shrinking ahead of the new harvest peak in Vietnam, slowing trade as buyers await fresh supplies.

Another trader said the futures market was quiet as most of Europe celebrated ALL SAINTS DAY.LIFFE COCOA UP: London cocoa rose on Tuesday, reclaiming some of the ground lost the previous session as the market kept a wary eye on the tense political stand-off in Ivory Coast, dealers said.

Liffe's most-active December closed up 11 pounds at 820 pounds a tonne after finishing Monday at its weakest since September 27.

It traded between 808 and 820 on volume of 3,042 lots drawn from a total of 4,927.

Market worries had focused on the potential for violence in Ivory Coast after the president said he would stay in office despite the end of his official mandate and opposition from rebels holding the north of the country.

Ivory Coast's crisis may rumble on but the cocoa market is counting on supply from an ample West African harvest and stocks.

Barring disruptions, supply is expected to be plentiful in coming weeks, but with hedging expected from West Africa as Ivory Coast and other producers shift cocoa.

Copyright Reuters, 2005


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