LONDON: Cocoa futures climbed on Tuesday as traders betting on price falls closed out some of their positions after the March contract hit its lowest in nearly three years a day earlier. March London cocoa was up 10 pounds, or 0.6 percent, at 1,791 pounds a tonne at 1220 GMT after falling to 1,714 pounds on Monday, its lowest since January 2014. Traders said a short-covering rally was to be expected after such a prolonged slide in prices but the overall mood remained bearish with sizeable West African crops still expected.
"Maybe there is a bit more mileage in this to the upside but overall nothing has changed," one trader in London said.
The cocoa market has been weighed down by the prospect of a global surplus in the current 2016-17 season as production in West Africa continues to climb.
The second contract has fallen 29 percent from a peak of 2,518 pounds in July, its highest in nearly four decades.
Cocoa purchases in Ghana, the world's second biggest producer after neighbouring Ivory Coast, are running ahead of last year's pace, according to Cocobod data seen by Reuters on Monday.
"The Ghana cocoa purchases numbers were higher and in the Ivory Coast the gap has almost closed," one trader said, referring to the strong pace of port arrivals in the world's top producer after a slow start to the season.
Cocoa port arrivals in Ivory Coast had reached 548,000 tonnes by Dec. 4, only slightly behind 556,000 tonnes a year earlier and should overtake last season soon, dealers said.
Traders said a very small delivery was expected against the December London cocoa contract which expired at 1200 GMT with the front month's discount of about 49 pounds to March providing little incentive to tender.
"Who is going to deliver cocoa when the spread is trading around 49 under? No-one. There will be very few tenders tomorrow," one dealer said. March New York cocoa was up $22, or 1 percent, at $2,262 a tonne.
Robusta coffee futures gained on news Vietnam's rainy season was lasting longer than usual, delaying harvesting in the central highlands and creating tightness in the market.
"There's not enough coffee to be shipped against the January contract," a trader said, adding the shortage of supply would likely last about two weeks. March robusta gained $26, or 1.3 percent, to reach $2,043 a tonne.
March arabica coffee was up 1.5 cents, or 1 percent, at $1.4345 per lb, as funds took a breather after driving the contract down to a 3-1/2 month low on Monday.
Sugar futures were down, with March raws off 0.1 cents, or 0.5 percent, at 19.15 cents per lb and white sugar futures down $2.1, or 0.4 percent, at $511.2 a tonne.
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