Cocoa prices fell to a 2-1/2 month low on Thursday as the advance of forces loyal to Alassane Ouattara in Ivory Coast was seen potentially opening the door for a resumption of exports from the world's top grower. Arabica coffee futures were slightly lower but still underpinned by tight supplies while sugar also registered modest losses as the outlook for Brazil's harvest improved.
Ouattara said forces under his command were "at the gates" of Abidjan on Thursday and called on the remaining loyalists of his rival Laurent Gbagbo to switch sides to prevent further suffering. European Union sanctions against Gbagbo, who has refused to step down since a presidential election last November which UN-certified results showed he lost, have helped bring exports from Ivory Coast to a virtual standstill.
Prices have fallen about 8 percent since Ouattara's forces began to seize towns in the western cocoa belt early this week. "I think people are putting out the flags a bit prematurely," said Gary Mead, VM Group analyst and editor of Worldcrops.com, adding Gbagbo still appeared to have a lot of support in the largest city, Abidjan.
July cocoa on Liffe fell 28 pounds to 1,920 pounds a tonne. For the first quarter, the second month Liffe contract is heading for a loss of around 6 percent. Robusta coffee futures on Liffe rose with May up $6 at $2,530 a tonne. For the first quarter, the second month Liffe contract is heading for a gain of 21 percent. Raw sugar futures on ICE were slightly lower with the market's focus on the harvest outlook in top producer Brazil.
"The inability of values to rise above 28 cents basis May NY has been noted and selling may appear with more confidence should we approach this level," Sucden Financial said in a report on Thursday. "Against this, final buyers may be waiting to price below 26 cents and more heavily towards 25 cents," Sucden added. Liffe May white sugar was unchanged at $707.80 per tonne. For the first quarter, the front month contract is heading for a loss of about 9 percent.
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