Cocoa futures extended losses on Tuesday as concerns over the Ebola virus failed to outweigh bearish factors including large supplies expected from top growing region West Africa, dealers said. Arabica coffee futures were lower, ahead of wet weather expected in top grower Brazil, while raw sugar futures held steady.
Dealers said cocoa futures could fall further as shipments of West Africa's main crop begin in November. "People got caught up on Ebola, it's not been reported to be a problem in Ivory Coast or Ghana - and even if it is, will it stop the flow of cocoa?" one European dealer said. "We've seen good arrivals at ports and in another two to three weeks we'll see shipments start to take place. This (falling market) is the reality of the fundamentals."
The dealer said West Africa's crops looked plentiful, while demand was weak, pointing to potential for further price falls. December cocoa on ICE was down $22, or 0.7 percent, at $2,948 a tonne by 1444 GMT, down more than 3 percent since the start of the week. London March cocoa futures were down 16 pounds, or 0.8 percent, at 1,897 pounds a tonne.
December arabicas fell 1.1 cents, or 0.6 percent, to $1.8980 per lb as forecasts for rain in Brazil were expected to provide some relief to the drought-stressed crop. A new cold front will bring widespread rains across Brazil's parched coffee and sugarcane areas, starting over the weekend, local forecaster Somar said. "Any rain that comes is going to limit any further losses; it will improve the conditions to allow for flowering," said Andrea Thompson, analyst with CoffeeNetwork, part of INTL FCStone.
"People are now hopeful that because there are signs of an increased rainfall pattern from next week that this could be the start of the wet season." Thompson added that tightening global coffee supplies were driven by lower arabica output, with a bumper harvest expected from top robusta grower Vietnam. January robusta coffee was up $1, or 0.1 percent, at $2,018 a tonne.
March ICE raw sugar futures eased 0.02 cent to 16.01 cents a lb, holding above September's more than four-year low of 13.32 cents, as dealers and analysts noted activity on the physical market had picked up. "There's more going into China than people think, so that seems to have caused a reassessment of demand numbers for the fourth quarter, bringing them up a bit," a European analyst said. "The market dipped ... maybe the Chinese thought it was cheap on the flat price basis. They seem to be buying at these levels." December white sugar rose $1.90 to $423.70 a tonne.