Cocoa prices on ICE dipped on Wednesday as dealers awaited clarity on how top producers Ivory Coast and Ghana will price their beans going forward, while coffee prices slipped.
September London cocoa settled down 21 pounds, or 1.1%, at 1,876 pounds per tonne, having touched a one-year high of 1,939 pounds on Monday.
In a major market shake-up, Ivory Coast and Ghana, which produce some 60% of the world's cocoa, plan to introduce a new pricing system for their beans.
The countries are implementing a fixed "living income differential" of $400 a tonne on all contracts sold by either country in the 2020/21 season.
"Short term they'll win (on price) but how long will it be before industry reorganize themselves and Ivory Coast and Ghana have too much production they have to control," said a Europe-based trader.
September New York cocoa settled down $13, or 0.5%, at $2,509 per tonne.
Total open interest climbed for the eighth straight session to reach a one-year high of 281,530 lots, ICE data show, as funds continue to add length, dealers said.
Cocoa arrivals at ports in Ivory Coast reached 2.061 million tonnes between Oct. 1 and June 30, up about 10% year on year.
In an indication of strong demand, however, Ivorian grinders processed 407,000 tonnes of beans by the end of June, up 7% year on year.
September arabica coffee settled down 1.55 cent, or 1.4%, at $1.059 per lb, its third negative finish in five sessions.
Prices hit a seven-month peak of $1.1565 on Friday on fears over the weekend frost in top-grower Brazil, but have since retreated as the market gauges the actual impact of the frost.
Brazil's Cooxupe will release a report later today with its initial evaluation of the frost's impact.
While Brazilian farmers are expecting crop damage from the frost, investors are maintaining their expectations for record production in 2020.
September robusta coffee settled down $6, or 0.4%, at $1,430 per tonne.
October raw sugar settled up 0.15 cent, or 1.2%, at 12.50 cents per lb.
Brazil's center-south region produced 2.19 million tonnes of sugar in the second half of June, 4% less than in the same period a year earlier, industry group Unica said.
India's monsoon rains in the week ending on Wednesday were above average for the first time since the start of the season on June 1, easing drought concerns. August white sugar settled up $2.10, or 0.7%, to $321.40 a tonne.