Cocoa futures prices fell sharply on Monday after the government of top grower Ivory Coast reached a deal to calm an armed military uprising. March New York cocoa was $83 or 3.7 percent lower at $2,178 per tonne at 1525 GMT, after rising on Friday following the outbreak of unrest. The streets of Ivory Coast's second-largest city Bouake were calm and the military presence was gone, residents said on Sunday, after a two-day mutiny that spread from the city across the country.
The mutiny began early on Friday when rogue soldiers demanding bonus pay seized Bouake. Soldiers at military camps in cities and towns across Ivory Coast, including the commercial capital Abidjan, joined the rebellion. The government and the soldiers reached a deal late on Saturday. A mutineer close to the negotiations said soldiers had returned to barracks.
"The return to barracks acted as a bit of a catalyst (for the decline in cocoa prices), then the (sell) stops kicked off and down we went," one London dealer said. Dealers said crop conditions remained favourable in Ivory Coast and an anticipated rise in production this year looked set to contribute to a global surplus in the current 2016/17 season.
March London cocoa was off 45 pounds or 2.5 percent at 1,776 pounds a tonne with losses limited by the weakness of sterling. Raw sugar prices were lower with March down 0.13 cents or 0.6 percent at 20.62 cents a lb.
Dealers said the market was consolidating after a strong post-Christmas rally driven partly by diminished crop prospects in top consumer India. They noted there is little sign yet of the supply tightness which is expected to emerge in the first quarter of 2017. "There seems to be plenty of sugar at terminals in Brazil waiting to be loaded and the shipping line-up has been reduced. Physical prices have not followed the rally in futures and at some stage something has got to give in order for convergence to take place," Sucden Financial senior trader Nick Penney said.
March white sugar was down $1.30 or 0.2 percent at $542.10 per tonne. Arabica coffee futures climbed to a five-week high as the market extended its rebound after a late 2016 slump. March arabica was up 2.80 cents or 2 percent at $1.4565 per lb after peaking at $1.4650, its highest since early December. March robusta rose $18 or 0.8 percent to $2,158 a tonne.
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