LONDON: London cocoa futures on ICE hit a 1-1/2 month low on Thursday amid ongoing worries over surplus supplies and risk averse sentiment in the wider financial markets.
COCOA
March London cocoa edged down 0.2% to 1,757 pounds per tonne at 1440 GMT, having hit its lowest since early September at 1,755 pounds. The outlook for the current 2021/22 cocoa crop remains good and as such, a rebound in demand may not be enough to prevent another global surplus.
The discount for front-month versus second-month cocoa is widening also, indicating ample nearby supply. December New York cocoa rose 1.1% to $2,531 a tonne, having touched a two-month low of $2,499 on Wednesday.
SUGAR
March raw sugar rose 0.8% to 19.12 cents per lb, having hit its weakest since late September on Tuesday at 18.82 cents. Dealers said the market fears a resumption of fund selling and maintains a bearish bias, with rains in key producers India, Thailand and Brazil.
They noted, however, that sugar is at or just above the Brazilian ethanol parity of 18.50-19.00 cents. If it falls any lower, cane mills will produce more ethanol at the expense of sugar, which should put a floor under prices. December white sugar rose 0.2% to $503.20 a tonne.
COFFEE
December arabica coffee fell 1% to $2.0345 per lb. Arabica is consolidating around $2 per pound after the sharp gains last week that took it near July's 6-1/2 year highs. Coffee growing areas of top producer Brazil are expected to continue benefiting from alternating periods of rain and sunshine during the next two weeks, dealers said.
Still, arabica remains underpinned by global shipping constraints, record high freight rates, falling stocks globally, both on and off exchange, and a lack of farmer selling in Brazil. January robusta coffee rose 0.3% to $2,138 a tonne.
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