London cocoa fell to its lowest in more than three years on worries over defaulted export contacts in top producer Ivory Coast, while raw sugar surged on technical buying.
March London cocoa futures were down 15 pounds, or 0.89 percent, at 1,671 pounds per tonne at 1223 GMT on Thursday after dipping to 1,663 pounds earlier, their lowest since November 2013.
March New York cocoa also fell $25, or 1.14 percent to $2,085 a tonne but remained above the four-year lows it hit earlier this week.
Dealers pointed to worries over defaulted cocoa contracts in top producer Ivory Coast, after the country’s Coffee and Cocoa Council (CCC) begun cancelling such contracts on Wednesday, with plans to resell the volumes.
“People are assuming that the tonnage might be greater,” said one dealer.
The CCC has already sold up to 200,000 tonnes cocoa for export between January and March in spot auctions as it seeks to counter the impact of forward sales defaults.
The dealer said the fresh lows in London had also triggered some speculator selling, further pressuring prices.
March raw sugar futures rose 1.15 percent, 0.24 cent to 21.08 cents per lb, while March white sugar climbed$5.60, or 1.02 percent, to $552.10 a tonne.
The rise in raw sugar was technically-driven as prices nudged past a resistance level, triggering buy stops and fresh fund buying.
Dealers said the market could test a recent high of 21.38 on Thursday, although gains may be capped until news on whether poor output and climbing domestic prices will force India, the world’s top consumer, to lower import duties on the sweetener, although authorities have dismissed such plans.
Indian sugar output fell 10 percent year-on-year to 12.85 million tonnes between Oct. 1 and Jan. 31, as mills in key producing states are closing early due to cane shortage, a producers’ body said on Thursday.
March arabica coffee was up 0.60 cents, or 0.40 percent, to $1.507 per lb.
March robusta coffee futures eased $7, or 0.31 percent, to $2,250 a tonne, after climbing to its highest in nearly 5-1/2 years in the previous session.
The market is monitoring whether tighter robusta supplies prompt Brazil to import it for the first time in decades.