LONDON: ICE arabica coffee plunged on Tuesday, hitting one-month lows as investors continued to sell amid forecasts for rains in top producer Brazil and lingering worries stocks from the country will be delivered to the exchange. Cocoa rallied amid political tensions in the Ivory Coast.
December arabica coffee was down 3.1 cents, or 2.5%, at $1.20 per lb at 1403 GMT, having earlier slid 6.5% to its lowest since mid-August at $1.1500. The contract closed down 7% on Monday. "Rainfall is forecast in key growing regions of Brazil, allaying concerns about moisture levels during the flowering phase of the 2021/22 crop," said Commerzbank.
A dealer said talk that large volumes of Brazil semi-washed coffee will be delivered to the exchange was also weighing on sentiment. Exchange stocks, currently at 20-year lows, continued to dwindle at last count, but overall supply in the market is plentiful following a record 2020/21 crop from Brazil.
November robusta coffee was flat at $1,387 a tonne, having hit its lowest in a month. October raw sugar edged up 0.1 cents, or 1%, to 11.87 cents per lb??, having hit a 1-1/2 month low on Monday. Dealers said sugar is battling weak physical demand at the moment and continuing estimates of a sizable global surplus in 2020/21.
The European Union's crop monitoring service MARS cut the EU sugar beet yield forecast for summer crops to 73.0 t/ha, down from 73.5 t/ha in August and 2.1% below the five-year average. France's farm ministry forecast sugar beet production at 32.2 million tonnes for this year's harvest, down 15% from the 2019 crop.
October white sugar, which expires later this session, rose $1, or 0.3%, to $350.80 a tonne. December London cocoa rose 76 pounds, or 4.2%, to 1,880 pounds per tonne, having hit its highest since mid-May at 1,904 earlier. December New York cocoa rose $100, or 3.9%, to $2,654 a tonne.
Police in top cocoa producer Ivory Coast fired tear gas on Monday to break up demonstrations against President Alassane Ouattara's decision to run for a third term in office, which opponents say jeopardises the country's democracy.
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