Cocoa futures on ICE tumbled on Thursday, marking the end of a rally driven by speculative action, while raw sugar fell to a four-week low. March New York cocoa settled down $107, or 4.5 percent, at $2,292 per tonne. This was its largest single-day percentage drop since Aug. 1, and comes one day after the contract hit a nearly 4-month high.
"There are no fundamental (supportive) issues. There is plenty of cocoa around right now," one dealer said, adding that the recent run-up in prices was driven by speculative short-covering. Speculators erased the bulk of a net short position during the recent rise in prices, while dealers said industry buying interest had dried up. March London cocoa settled down 51 pounds, or 3 percent, at 1,671 pounds per tonne.
Good weather and huge port arrivals indicate ample supplies from top grower Ivory Coast, which is in the midst of its main harvest. The market has been supported by signs of rising physical demand for cocoa, which were reinforced by comments from chocolate maker Barry Callebaut on Wednesday.
Indonesia's 2019 cocoa imports may be up to 300,000 tonnes, from current levels of 260,000 tonnes, as chocolate products become more popular in the country. March raw sugar settled down 0.17 cent, or 1.3 percent, at 12.84 cents per lb and traded as low as 12.78 cents per lb, a four-week low.
A potential rise in Brazilian production next season should boost global supplies while exports from India could also help keep the market on the defensive, dealers said. India plans to export 2 million tonnes of raw sugar to China from next year, the trade ministry said, as part of an effort to trim bulging stocks and bridge a widening trade deficit.
The US lowered its outlook for sugar stocks for 2018/19 on reduced production estimates. March white sugar settled down $2.20, or 0.6 percent, at $347.10 per tonne. March arabica coffee settled up 0.75 cent, or 0.6 percent, at $1.2020 per lb. Brazil shipped 3.45 million 60-kg bags of green coffee in October, up 33 percent from a year earlier, boosted by a record crop, exporters association Cecafé said.
January robusta coffee settled down $3, or 0.2 percent, at $1,684 per tonne. Output from Vietnam's 2018-19 harvest, which started last month, may not be as high as previously forecast due to unfavourable weather conditions, traders said on Thursday.