Cocoa gains after better than expected Q4 demand data

LONDON: Cocoa prices on ICE rose on Friday after demand data for North America and Asia came out better than expected, while raw sugar retreated slightly from its stunning 5% rally in the prior session.

COCOA

March New York cocoa rose 1% to $2,524 a tonne at 1542 GMT.

North American cocoa grindings, a measure of demand, rose in the fourth quarter of 2020 to 118,043 tonnes, up 6.95% from the same period a year earlier, industry data showed.

Asia's fourth-quarter cocoa grind fell 4.2% from a year earlier to 217,546 tonnes.

Dealers said the data, on balance, eased market fears over weak demand amid ongoing coronavirus lockdowns but added there was still plenty of excess supply around, meaning sideways trade was most likely going forward.

March London cocoa rose 1.9% to 1,727 pounds per tonne.

SUGAR

March raw sugar fell 1.3% to 16.46 cents per lb, having hit its highest in more than 3-1/2 years in the prior session at 16.75 cents on concerns over nearby supply tightness.

There is market talk of continuous buying from top consumer Indonesia, while funds, betting on a global economic recovery this year, remain keen on commodities.

"While the price overshoot could last for the March expiry, we do not believe current levels will persist over the medium-term," said Citi in a note.

"Cash-strapped Indian mills are in a rush to sell more sugar to capture the high prices ... and could use up the 6 million tonne export quota if high prices persist," it added.

March white sugar fell 0.5% to $462.10 a tonne amid an absence of selling from Thailand and the EU, and reports of global container shortages.

COFFEE

March arabica coffee rose 0.8% to $1.2830 per lb, having hit its highest in nearly two weeks.

Arabica is gaining support from a strengthening Brazilian real.

March robusta coffee rose 1% to $1,345 a tonne.