LONDON: Cocoa futures on ICE fell on Tuesday, weakened by further evidence that demand remains sluggish while raw sugar and arabica coffee prices also fell.
COCOA
December New York cocoa was $27, or 1.35 percent, lower at $1,978 a tonne at 1345 GMT. The benchmark second position had peaked on Monday at a five-week high of $2,021.
Dealers noted demand had yet to revive significantly despite a sharp drop in prices since the beginning of last year.
"In the first half-year, Lindt & Spruengli was once again confronted with stagnating or slow-growing chocolate markets, especially in its most important market, North America, and consumer sentiment that remained largely restrained", the Swiss chocolate maker said on Tuesday.
North America's cocoa grind fell by 1.05 percent in the second quarter of 2017, data from the National Confectioners' Association (NCA) showed last week.
The market remained underpinned, however, by the prospect of lower production in West Africa in the 2017/18 season.
December London cocoa fell 22 pounds, or 1.40 percent, to 1,547 pounds a tonne.
SUGAR
October raw sugar was 0.14 cent, or 0.97 percent, lower at 14.26 cents per lb.
Dealers said producer selling had helped to stall the recent run-up in prices which saw the front month climb to a 7-week high of 14.69 cents on Friday.
"We expect near-term trading to be volatile. Producers still want to sell. And momentum investors are still close to levels that are likely to trigger buying back earlier sales," Commonwealth Bank of Australia analyst Tobin Gorey said.
Brazil's centre-south region produced 3.101 million tonnes of sugar in the first half of July, cane industry group Unica said on Tuesday.
Dealers said the report was mildly bearish. An S&P Global Platts survey of analysts had put production at 3.073 million.
October white sugar was off $3.70, or 0.94 percent, at $389.60 a tonne.
COFFEE
September arabica coffee fell 2.15 cents, or 1.62 percent, to $1.3040 per lb with the decline seen as largely a technically-driven correction after the recent strong advance.
Dealers said investors had begun to trim a large net short position while the market was also supported by a slowdown in exports from Brazil with 2017 an off-year in its biennial crop cycle.
"The decline in prices so far this year was probably exacerbated by negative investor sentiment. As such, we expect prices to rise in the second half of 2017. Indeed, the price of arabica coffee has already started to edge up," Capital Economics said in a market note.
September robusta coffee rose $7, or 0.33 percent, to $2,110 per tonne.
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