Cocoa prices fall sharply as Europe second-quarter grind declines

LONDON: Cocoa futures fell sharply on Thursday as a decline in Europe’s second-quarter grind added to worries over weak demand, while sugar and coffee prices also eased.

Cocoa

ICE London cocoa lost 5% to £4,145 per metric ton by 1051 GMT.

Dealers said the market remained volatile with a 20% rise in prices last week followed by a nearly 8% decline so far this week.

Weak demand remained a concern with a 4.6% year-on-year decline in the European second-quarter grind to 316,366 metric tons, the lowest total for the quarter since 2020.

Asia’s second-quarter grind was stronger than many had anticipated with a 25.07% year-on-year rise. Data from North America is due to be issued later on Thursday.

The July contract is due to expire on Thursday with an open interest of 3,781 lots, as of July 15, equating to 37,810 tons of cocoa.

New York cocoa fell 4.8% to $5,603 a ton.

Raw sugar heads back near two-week lows; cocoa also retreats

Sugar

Raw sugar was down 2.6% at 14.47 cents per lb after slumping to a two-week low of 14.45 cents.

Dealers said weak physical demand was weighing on prices.

They said the weak performance of the August white sugar contract ahead of its expiry on Thursday reinforced concerns about a lack of demand.

Other bearish factors include good progress during the last couple of weeks in the cane harvest in Brazil.

White sugar fell 2.3% to $438.90 a ton.

Coffee

ICE arabica coffee slid 2.25% to $3.1940 per lb.

Dealers said the harvest in top coffee grower Brazil had been gathering pace although progress continued to lag last year’s pace.