LONDON: New York cocoa futures prices fell to a two-month low on Tuesday with the market weighed on by generally favourable crop conditions in West Africa, heightening the prospect of a second consecutive global surplus in 2017/18.
COCOA
March New York cocoa was down $8, or 0.4 percent, at $1,995 a tonne at 1238 GMT after dipping to a low of $1,989, the weakest for the second month since Oct. 2.
"I don't really see any reason to buy at the moment. I think the crop is going pretty well and we've a huge surplus from the previous season," one dealer said.
Dealers noted that the current premium for New York over London remained unusually higher with prices in Europe weighed on by supplies of cocoa from Cameroon which is considered less desirable than supplies from Ivory Coast or Ghana.
"The Cameroons, which no-one want really wants, are weighing on London," one dealer said.
March London cocoa was up 3 pounds or 0.2 percent at 1,468 pounds a tonne, boosted by the weakness of sterling.
Sterling skidded to six-day lows on Tuesday, heading for its worst day in over a month, on uncertainty over whether Britain can reach a deal with the European Union to open talks on post-Brexit free trade.
COFFEE
January robusta coffee was unchanged at $1,722 a tonne.
Commerzbank said in a market note that the massive downslide in prices since the summer appeared to have to an end.
"After all, the expectation of a high robusta crop in Vietnam (where harvesting has just begun) and the prospect of a significantly better robusta crop in Brazil next year are already priced in," the bank said.
Prices have been consolidating in the last few days after the January contract fell more than 20 percent from a peak of $2,147 a tonne on Aug. 8 to a low of $1,699 on Nov. 28.
March arabica coffee slipped 0.55 cents, or 0.42 percent, to $1.2795 per lb.
"The arabica coffee price is continuing its 'two steps forwards, one step back' approach and has so far failed to settle in any permanent fashion above the $1.30 per pound mark," Commerzbank said.
SUGAR
March raw sugar was down a marginal 0.01 cent or 0.1 percent at 15.05 cents per lb.
March white sugar was down $0.40, or 0.1 percent, at $386.00 a tonne.
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