Cocoa futures ended 2011 down around 30 percent on Friday, while sugar dropped more than 20 percent and coffee also showed a weak performance, in a year of worries on the global economic outlook.
The markets are closed today for the New Year holiday and will reopen on Tuesday. ICE cocoa futures settled firmly on Friday in thin holiday dealings, lifted by the firm sterling and higher commodity complex.
ICE March cocoa settled the day up $26 at $2,109 per metric ton, closing the year down 31 percent, which was the spot contract’s biggest annual decline in 12 years.
It was also one of the worst performers on the Thomson Reuters-Jefferies CRB index, pressured by abundant West African supplies.
“Demand will come back on line in anticipation of the Easter buying season,” said Keith Flury, senior soft commodities analyst with Rabobank, adding he expected cocoa prices to move sideways in early 2012, with industry buying kicking in.
Raw sugar futures ended 2011 as one of the weakest performing commodities of the year on the CRB, tumbling 28 percent on investor liquidation and increased supplies.
The market scaled a 30-year peak over 36 cents a pound in the spring but then fell as supplies swelled from top grower/exporter Brazil and No. 2 producer India.
ICE benchmark raw sugar futures closed down 0.21 cent, or 0.9 percent, at 23.30 cents a pound on Friday on investor selling and book-squaring on the last trading day of 2011, pressured by big crops in the European Union, Russia, Ukraine, India and Thailand. ICE March raw sugar futures inched down 0.21 cent, or 0.9 percent, to close at 23.30 cents a pound. The fall outstripped forecasts. A Reuters poll of analysts and traders in July produced a median end-year raw sugar price of 24.10 cents.
Coffee’s fundamentals are bullish going into 2012 due to weather-related problems in major producer Colombia that have led to smaller crop forecasts in the world’s top grower of washed arabica beans, dealers said.
“Coffee, with its better fundamentals, is probably attracting a little bit of buying and not warranting any selling here,” said Sterling Smith, analyst with Country Hedging in Minnesota.
Macroeconomic concerns have the potential to drag on softs prices further in 2012 through their impact on currency.
“The underlying importance of the dollar is going to be a major factor,” Flury said. Vietnamese coffee prices will stay firm as roasters replenish stocks, dealers said.
London second-month robusta coffee finished 2011 down around 14 percent.