LONDON: Arabica coffee prices tumbled on Tuesday amid lacklustre demand and bearish chart signals, while New York cocoa slumped under the weight of a stronger dollar and broader commodity weakness.
COFFEE
September arabica coffee was down 2.90 cents, or 2.1 percent, at $1.3405 per lb by 1336 GMT, extending losses from the previous session.
Dealers said the weakness was driven by deteriorating charts, with momentum having soured after a short-covering rally earlier this month ran out of steam.
"The market is correcting back down," said one dealer. "We haven't got the bullish news to spur either market on from these levels. So it's really all about (fund) positioning."
Physical demand also remains weak, with roasters well covered and largely unwilling to stock up at current levels, dealers said.
September robusta coffee fell $19, or 0.9 percent, to $2,086 per tonne.
Focus was on a robusta options expiry on Wednesday, which was helping limit losses in that market, dealers said.
COCOA
September New York cocoa fell $43 or 2.2 percent to $1,880 a tonne, after hitting its weakest since mid-July.
Broader markets pressured, as the dollar resumed its recovery amid easing tensions around North Korea, while energy markets weakened further.
September London cocoa also fell 23 pounds or 1.5 percent to 1,469 pounds a tonne, having earlier hit its lowest since July 13.
Both markets were weighed by follow-through selling, after tumbling in the previous session, dealers said.
Dealers also pointed to fresh concerns over excess supplies, after farmers in top grower Ivory Coast said the next harvest is likely to be abundant for the first three months and may start as early as mid-September.
"There doesn't appear to be too much out there that gives you optimism for higher prices at the moment," said one dealer.
SUGAR
October raw sugar was down 0.16 cent or 1.2 percent at 13.34 cents per lb, retreating after surging more than two percent the previous day on chart-based buying.
Fundamentals remained broadly bearish, however, with easing concerns about dry weather in top grower Brazil.
"Now meteorologists are forecasting the urgently needed rainfall for the next few days," Commerzbank said in a market note.
Egypt's state buyer (ESIIC) is seeking to purchase 50,000 tonnes of raw sugar for delivery in November, a tender document said.
October white sugar eased $3.20, or 0.9 percent, to $367.30 a tonne.
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