New York cocoa prices dropped to the lowest in more than eight years on Monday, while the London market touched a 2013 trough as the market extended a slide fuelled by excess supplies. Raw sugar futures fell to a six-week low, while the March white sugar contract's discount to May narrowed sharply as the spot contract expired. New York May cocoa settled down $37, or 1.9 percent, at $1,925 per tonne, after falling to $1,921, the lowest for the second position since November 2008.
The contract fell for the eighth straight session, with dealers pointing to the resale of Ivorian cocoa after a wave of defaults by local exporters in Ivory Coast hit a market already struggling to cope with excess supplies. "It is a mess in the Ivory Coast and the market is digesting all this additional cocoa," one dealer said. US government data showed speculators held their biggest bearish stance in New York cocoa contracts in nearly five years, in the week to February 7.
The market shrugged off a lower 2016/17 Ghana cocoa forecast by Cocobod and comments by Ivorian farmers saying they were too indebted to invest in fertilizer or pesticides. May London cocoa settled down 36 pounds, or 2.2 percent, at 1,574 pounds per tonne, the weakest since August 2013. May raw sugar settled down 0.44 cent, or 2.2 percent, at 19.99 cents per lb, after dipping to a low of 19.89 cents, the weakest since January 3.
Dealers said the market was weighed by technically driven fund long liquidation after Friday's weak close as well as a forecast for India to import around 1.5 million tonnes of sugar in 2016/17. "The market wanted to hear that India would have to import more than 1.5 million tonnes," one US trader said. May white sugar settled down $3.80, or 0.7 percent, at $537.30 per tonne. Its discount to May narrowed sharply to $4, from Friday's contract low of $13.90.
March white sugar settled down 0.7 percent at $532.40 as the contract expired. A small delivery of around 100,000 tonnes was anticipated. Robusta coffee was lower as funds continued to scale back a large net long position. March robusta coffee settled down $21, or 1 percent, at $2,107 per tonne. March arabica coffee settled down 1.6 cent, or 1.1 percent, at $1.4655 per lb.