Cocoa ends lower; sugar falls with bank meltdown fears

NEW YORK/LONDON — Cocoa futures on ICE fell to one-month lows on Tuesday as a technical sell-off persisted, while raw sugar dropped in the wake of market turmoil caused by the collapse of three banks in the United States in less than a week.

COCOA: May New York cocoa settled up $5 or 0.2% to $2,658 a ton. It earlier fell to 2,625 a ton, the lowest since Feb. 13.

Fitch Solutions revised up its average 2023 cocoa price forecast by $120 a ton to $2,500, citing a 7.9% decrease in its forecast for Ghanaian production in the 2022/23 (October-September) season.

It said that overall, it sees a 78,000 ton deficit in 2022/23.

May London cocoa hit a month-low of 2,025 pounds (lbs) per ton, before recovering ground to settle up £12 or 0.6% to £2,053 per ton. It set a six-year high of £2,177 earlier this month.

SUGAR: May raw sugar settled down 0.12 cents or 0.6% at 20.68 cents per lb.

Dealers said sugar shows good resilience considering the gloomy macro economic picture. This suggests bullish fundamentals, such as the prospect for lower output, remains a driving factor for the market, they said.

France’s largest sugar and ethanol producer Tereos faced a union and government backlash after it said it was closing its sugar activities in a factory in northern France, blaming an expected drop in sugar beet output.

The area sown with beets is expected to fall to a 14-year low in France as a ban on neonicotinoid pesticides is deterring farmers from planting because they fear crop damage.

May white sugar futures settled down $1.30 or 0.2% at $581.30 a ton.

COFFEE: May arabica coffee settled down 3.75 cents or 2.1% at $1.7545 per lb. It fell to a more than one-month low of $1.7325 on Monday.

Certified arabica stocks at the Intercontinental Exchange stood at 782,702 60kg bags on March 13 — their highest in nearly two weeks.

May robusta coffee settled down $33 or 1.6% at $2,080 a ton. It fell to $2,077 a ton, lowest since Feb. 17. —