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London cocoa hits two-week low; sugar and coffee firm

LONDON: London cocoa futures on ICE hit a two-week low on Thursday on worries over demand growth while sugar and coffee rose as the dollar paused its 10-day rally and oil prices surged once more.

A weaker dollar makes dollar-priced commodities cheaper for non-US investors while higher oil prices encourage Brazil’s cane mills to produce more cane-based ethanol fuel at the expense of sugar.

Cocoa

December London cocoa fell 0.4% to 1,811 pounds a tonne, having hit its lowest in two weeks at 1,809 pounds.

Data that showed Europe’s third-quarter cocoa grind rose 8.7% from a year earlier but only 3.5% from the same period in pre-pandemic 2019 continues to weigh on sentiment, dealers said.

December New York cocoa was flat at $2,602 a tonne, having hit its lowest in nearly two weeks at $2,588 on Wednesday.

Coffee

December arabica coffee rose 1% to $2.1080 per lb, having hit $2.1515 on Tuesday, just short of a seven-year peak.

Top producer Brazil’s September exports of green coffee fell 29% from a year earlier, exporters association Cecafe said, citing continued shipping bottlenecks.

“The escalating shortage (of) containers and vessel space has seen freight costs on primary shipping routes increase by 525% to over 1,000% in the past 18 months,” one dealer said.

November robusta coffee rose 0.8% to $2,152 a tonne.

Raw sugar dips from multi-year highs, coffee also falls

Sugar

March raw sugar rose 0.3% to 19.91 cents per lb, having touched its highest since February 2017 on Monday at 20.61 cents.

Sugar production in Brazil’s centre-south region fell 19% year on year in the second half of September, industry group Unica said on Wednesday.

Dealers said the fall in output was slightly lower than expected and that sugar remains rangebound overall.

December white sugar declined $2.90, or 0.6%, to $514.10 a tonne.

London cocoa hits two-week low; sugar and coffee firm

Source: Brecorder

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