LONDON: Cocoa prices on ICE hit one-year highs on Monday as low volumes exaggerated a technically driven rally and as concerns persisted about plans by Ivory Coast and Ghana to introduce a floor price for cocoa sales.
COCOA
September London cocoa rose 84 pounds, or 4.6pc, to 1,923 pounds per tonne at 1425 GMT, having hit its highest since last year May at 1,929. Prices rose 2.6pc last week.
Top producers Ivory Coast and Ghana failed last Wednesday to come to an agreement with the chocolate industry on how to introduce a cocoa floor price, leaving dealers concerned about future pricing.
"It's a technical breakout. Markets don't have lots of volume and can easily be pushed around. Lots of people don't want to commit, they'd rather wait," said a dealer. He added that the floor price plan was bullish, especially with industry cover said to be limited.
Above-average rainfall mixed with sunshine in Ivory Coast's cocoa-growing regions last week could boost the upcoming October-to-March main crop, farmers said.
Cocoa arrivals at ports in top grower Ivory Coast reached 2.115 million tonnes between Oct. 1 and July 7, exporters estimated, up about 11 percent.
September New York cocoa rose $101, or 4.1pc, to $2,522 per tonne, having hit its highest since last July at $2,572. Prices rose 1.6pc last week.
COFFEE
September arabica coffee was down 4.15 cents, or 3.7pc, at $1.0395 per lb, having plunged more than 5 percent to 1.0530 earlier.
The contract peaked at a seven-month high on Friday, clocking up its third positive weekly finish in a row.
Dealers were weighing up cold, frost-inducing weather in top-grower Brazil over the weekend against predictions that the frost may not cause much crop damage.
The weakening in Brazil's real versus the dollar was also pressuring prices. A weak real encourages producer selling of dollar-priced coffee.
September robusta coffee fell $9, or 0.6pc, to $1,435 per tonne, having hit a three-month peak on Friday.
SUGAR
October raw sugar was up 0.11 cents, or 0.9pc, at 12.47 cents per lb, after rising 0.3pc last week, its fourth positive weekly finish in five weeks.
The market continues to keep a close watch on India's monsoon, with rainfall beginning to pick up but concerns persisting that it will be weaker than normal this year, which could curb sugar production.
"Sugar continues to discount weather-related production threats, and the looming transition to a modest world market deficit in 2019/20 in our view," JPMorgan said in a note.
August white sugar rose $0.60, or 0.2pc, to $320.40 per tonne.
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