LONDON: New York cocoa futures on ICE dipped to an eight-month low on Wednesday as the market struggled to absorb excess supplies following bumper harvests in top growers Ivory Coast and Ghana while raw sugar prices also weakened.
September New York cocoa was down $20, or 0.9%, at $2,278 a tonne by 1315 GMT, after dipping to an eight-month low of $2,276.
Ghana’s graded and sealed (G&S) cocoa arrivals rose to 981,222 tonnes as of June 17 from the start of this season’s harvest on Oct. 1, compared with 754,800 tonnes the previous season, figures from marketing board COCOBOD showed on Wednesday.
Ivory Coast port arrivals are also running above last season’s pace.
Weak demand linked to the Covid-19 pandemic has also contributed to expectations that there will be a large global surplus in the current 2020/21 season.
Dealers said price charts were also looking bearish after the market’s recent weak performance, particularly after the September contract closed below $2,300 on Tuesday.
“The close below $2,300 could trigger losses back to $2,250,” Sucden Financial said in a technical note.
September London cocoa fell by 22 pounds, or 1.4%, to 1,581 pounds a tonne.
October raw sugar fell by 0.23 cent, or 1.3%, to 17.64 cents per lb, extending its retreat from a four-month peak of 18.49 cents set last week.
Dealers continued to assess the extent of damage to Brazilian cane from recent frosts, although early indications suggest losses may not be severe.
August white sugar fell by $8.50, or 1.9%, to $435.50 a tonne.
September arabica coffee rose by 2.55 cents, or 1.7%, to $1.5065 per lb.
Dealers said disruptions to exports out of both Brazil and Vietnam due to a shortage of available capacity on container ships continued to support prices.
September robusta coffee rose by $27, or 1.6%, to $1,706 a tonne.
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