London cocoa prices hit lowest level in nearly two years

LONDON: London cocoa prices on ICE hit their lowest in nearly two years on Thursday as data showed sharp falls in demand in Europe in the second quarter and as dealers bet on a rebound in supply next season.

COCOA

September London cocoa edged up 4 pounds, or 0.3%, to 1,538 pounds per tonne at 1404 GMT, having hit its lowest since October 2018 at 1,525.

Europe's second-quarter cocoa grind, a proxy for demand, fell 8.9% to 314,108 tonnes from a year earlier, its lowest in five years.

The US second quarter cocoa grind will be released later in the session, while grind figures from Asia are due on Friday. Dealers expect weak readings in both regions.

A favourable outlook for the 2020/21 harvest that starts in October in top grower Ivory Coast also weighed on cocoa.

September New York cocoa rose $12, or 0.6%, to $2,148 a tonne.

SUGAR

October raw sugar was down 0.09 cents, or 0.8%, at 11.73 cents per lb, having closed up 4.4% on Wednesday.

Dealers cited reported difficulties in getting sugar out of top producer India because of coronavirus-related supply chain disruptions.

However, they said sugar was unlikely to leave its recent 11.30-12.30 cents range, with selling encountered whenever the price moves above 12 cents.

The CEO of Suedzucker, Europe's largest sugar refiner, reaffirmed expectations of better full-year profits.

This year's sugar beet harvest in France, the EU's largest beet producer, will fall at least 13% due to reduced sowings and severe pest attacks.

August white sugar, which expires later this session, fell $0.5, or 0.1%, to $350.30 a tonne.

COFFEE

September arabica coffee rose 0.7 cent, or 0.7%, to 97.80 cents per lb.

Indicating poor demand, stocks of green coffee in the United States rose for the third consecutive month on Wednesday and passed the seven million bags (60-kg) mark for the first time since October 2019.

September robusta coffee rose $14, or 1.1%, to $1,240 a tonne.

Vietnam's domestic coffee prices were unchanged from a week earlier on Thursday, capped by weak demand, while Indonesian premiums narrowed due to abundant supplies.