LONDON: Cocoa futures on ICE fell sharply on Monday, erasing some of the market’s recent strong gains, while sugar and coffee prices also retreated.
May New York cocoa fell 2.7% to $2,735 a tonne by 1540 GMT, extending the market’s decline from last week’s two-year high of $2,838.
Dealers noted the setback was not unexpected given the extent of the recent run-up in prices, with the May contract climbing more than $300 a tonne in less than two weeks before running into a wave of profit-taking.
The market remained underpinned, however, by a significant drop in production in Ghana in the current 2021/22 season and concerns that dry weather will curtail output in Ivory Coast over the coming weeks.
Poor rains and hot weather last week in most of Ivory Coast’s cocoa regions could damage development of the April to September mid-crop, farmers said on Monday.
“The current meteorological conditions indicate that drier weather ... is prevailing in the country’s main cocoa-growing areas and thereby raising concerns over the size and quality of the crop scheduled later on for the season,” the International Cocoa Organization said in an update on Monday.
May London cocoa was down 1.8% at 1,814 pounds a tonne.
March raw sugar fell 1.1% to 18.06 cents per lb as improving outlooks for crops in India and Thailand continued to exert downward pressure on prices.
Egyptian state buyer Egyptian Sugar and Integrated Industries Co (ESIIC) has issued an international tender to buy at least 50,000 tonnes of raw sugar, European traders said on Monday.
May white sugar fell 1.3% to $483.10 a tonne.
A total of 358,650 tonnes of mostly Indian white sugar has been tendered against the March contract on ICE Futures Europe, exchange data showed on Monday.
May arabica coffee fell 2.4% to $2.46 per lb, slipping further from a 10-year peak of $2.6045 set last week.
May robusta coffee was down 0.9% at $2,249 a tonne.