LONDON: London cocoa futures on ICE fell on Wednesday to a three-week low as a stronger sterling offset signs of recovering chocolate demand, while white sugar slipped to its lowest in more than two years amid worries about a global supply glut.
COCOA
March London cocoa was down 19 pounds, or 1.4 percent, at 1,345 pounds a tonne by 1428 GMT, after touching a three-week low of 1,329 pounds.
Dealers said prices were weighed by the British pound, which jumped to its highest since the Brexit vote.
They also pointed to bearish chart signals, after a recent failure to break above resistance levels.
This offset the impact of signs that chocolate demand could be recovering, after Swiss chocolate maker Barry Callebaut reported that sales volumes rose 8 percent in its first quarter which ended Nov. 30.
Global chocolate confectionery sales volumes grew 3.1 percent in the three months to October, according to Nielsen data.
"The figures are basically telling the same story that we're getting from the grinds - low prices are providing a stimulus to demand," said one dealer. "But it seems we still can't really shake off this surplus."
Recent grinding data showed fourth-quarter cocoa processing in Asia rose 4.2 percent year-on-year, while European grindings climbed 4.4 percent.
March New York cocoa rose $13, or 0.7 percent, to$1,942 a tonne.
SUGAR
March white sugar was down $0.80, or 0.2 percent, at $352.20 per tonne, after falling to $350.60, its lowest since September 2015.
Prices were pressured by worries about a looming global supply glut amid a sharp rise in production from the EU, Pakistan, India and Thailand.
March raw sugar fell 0.07 cents, or 0.5 percent, to 13.12 cents per lb.
Dealers noted the market was technically oversold and due for a correction, although producer hedging could sap momentum.
"Whilst some (producers) have chased prices down, we feel the majority have held back given the low price," said Nick Penney, senior trader at Sucden Financial, in a note.
COFFEE
March arabica coffee climbed 1.50 cents, or 1.2 percent, to $1.2245 per lb, lifted by a surge in the Brazilian real.
A stronger real supports prices of dollar-denominated commodities such as coffee because it discourages Brazilian producers from selling by reducing their returns in local currency terms.
March robusta coffee rose $14, or 0.80 percent, to$1,763 a tonne.
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