LONDON: London cocoa futures on ICE hit their lowest in 2-1/2 weeks on Wednesday as the premium for nearby cocoa weakened, though available stocks remain tight overall, especially in Europe.
COCOA
July London cocoa fell 11 pounds, or 0.65pc, to 1,669 pounds a tonne by 1217 GMT, having hit a 2-1/2 week low earlier.
The front month May's premium to July weakened to around 90 pounds from a near record high of 159 pounds hit on Monday.
Dealers said a shortage of good-quality cocoa in Europe had helped to drive up the May contract's premium recently, and that this shortage persists even though the premium has eased.
"There's very little uncommitted stock right now in Europe.
It doesn't mean you have a big (global) deficit but it certainly means you don't have a big surplus," said a dealer.
July New York cocoa fell $19, or 0.8pc, to $2,274 a tonne, having hit a three week low earlier.
SUGAR
July raw sugar rose by 0.03 cents, or 0.25pc, to 11.97 cents per lb, continuing to steady after falling to its lowest since October 2018 last week.
A global sugar supply deficit of 2.1 million tonnes is seen developing in the 2019/20 season, according to S&P Global Platts.
Broker INTL FC Stone sees a global sugar deficit of 5.7 million tonnes in 2019/20, but sees stocks at 74 million tonnes, limiting price upside.
"All this talk about global production deficits probably means the lows of last week may prove to be the lows for the longer term," said a dealer.
However, he added: "Any push above 13 cents will find good producer selling so that is likely to put a ceiling on prices in the short term."
India's monsoon rains will arrive on its southern coast on June 4 and deliver less rain than average this year, a private weather forecaster said.
ICE August white sugar was up $0.40, or 0.1pc, at $329 a tonne.
COFFEE
July arabica coffee futures were 0.2 cents, or 0.1pc, lower at 90.85 cents per lb, pulling away from a 13-year low of 87.60 cents set earlier this month.
Dealers said low prices were beginning to impact production and that prices may rise in the short term following a prolonged decline driven by excess Brazilian supplies.
July robusta coffee fell $5, or 0.3pc, to $1,377 a tonne, extending its rebound from a nine-year low of $1,267 set earlier this month.
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