London cocoa futures fell to a six-week low on Thursday showing signs of resuming a prolonged slide in response to expectations of a substantial global surplus in the current 2016/17 season.
March cocoa in London was down 27 pounds or 1.55 percent at 1,720 pounds a tonne at 1421 GMT after earlier dipping to a low of 1,717 pounds, the weakest for the front month since December 12.
Prices fell sharply during the second half of 2016 as favourable crop weather in top producer Ivory Coast led to predictions of a large global surplus.
But the market has become range-bound in the last few weeks.
"We will break out of the range to the downside? It is a little bit premature to say," one London dealer said, adding there was little sign yet of investment funds aggressively adding to short positions. Dealers said selling on Thursday was largely technically-driven
"A lot of the bearish news (on a favourable crop outlook) is already in the market," the dealer said.
March New York cocoa was down $55 or 2.5 percent at $2,137 a tonne.
Raw sugar futures were slightly lower as the market kept a close watch on developments in India where a poor crop could eventually lead the government to cut import duty.
Dealers said the market could continue to drift in a range ahead of a major industry gathering in Dubai next month and clearer indications on potential deliveries against the March contract which expires on February 28.
"We are going sideways until the market gets a little more clarity," Tom Kujawa, co-head of the softs department at Sucden Financial, said. March raws was up a marginal 0.02 cents or 0.1 percent at 20.36 cents a lb while March whites rose $0.70 or 0.1 percent to $536.50 per tonne. Dealers said a stronger dollar contributed to the decline in prices of markets denominated in the US currency. Robusta coffee futures fell with the start of the Tet holiday in top producer Vietnam slowing physical trade. March robusta was down $9 or 0.4 percent at $2,222 a tonne while March arabica fell 1.05 cents or 0.7 percent to $1.5185 per lb.