LONDON: London cocoa futures on ICE hit fresh 2-1/2-year lows on Monday with the well-supplied market unable to stage a recovery despite a move by Ghana, the world’s second-biggest grower, to slash the fixed price paid to cocoa farmers.
Trade was quiet and volumes thin, however, as US markets were closed for Presidents Day and some Asian markets were closed for the Lunar New Year.
COCOA
London cocoa hit its lowest since mid-2023 earlier at 2,532 pounds a metric ton, and was down 0.2percent at 2,583 pounds/t by 1408 GMT. Ghana last week cut the price it pays to farmers by about a third to better align it with futures prices and try to spur demand.
Dealers said hedging pressure and fresh speculative sales continue to weigh on the chocolate ingredient, not least because even with the price move, Ghana still has excess stocks to sell.
The No. 2 cocoa grower said last week it has about 50,000 metric tons of unsold cocoa sitting at its ports. It was unable to shift the stock because the beans were priced significantly above ICE futures.
Weak demand is also weighing on cocoa meanwhile.
The cocoa grind in top grower Ivory Coast slipped 2.1percent year-on-year in January and is down 7.4percent since the season’s start, data showed earlier.
Cocoa arrivals at ports in Ivory Coast fell 4.4percent from the season start to February 15 versus the same period last season, but dealers said the country, like Ghana, has unsold stocks to sell and the port arrival figures don’t reflect this.
COFFE
Robusta coffee rose 0.6percent to USD3,822 a ton. The contract has been rising over the past week alongside arabica, which is up thanks to weather concerns in major producing countries like Brazil and Colombia.
SUGAR
White sugar rose 2.7percent to USD408 a ton, recovering from Friday’s five-year low. Broker ADMIS said there are indications the global surplus for 2025/26 may be even larger than previously thought, which should provide a ceiling to any rallies.
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