Cocoa futures fall on signs of waning demand, sugar recovers
Press Hub UCapital
Share:
Cocoa futures on ICE ended sharply lower on Thursday, reflecting weaker-than-expected fourth-quarter demand for this key chocolate ingredient. Simultaneously, white sugar prices rebounded from a three-year low seen on Wednesday, signaling potential market recovery.
Cocoa: demand weakens globally
London cocoa futures dropped by 217 pounds, equivalent to a 2.5% decline, closing at 8,529 pounds per metric ton. Similarly, New York cocoa futures fell by 2.9%, settling at $10,502 per ton. European fourth-quarter cocoa grind data showed a notable 5.4% year-on-year decline, with Asia reporting a marginal 0.52% drop. Brazil’s cocoa processing fell even further, down 5.5% during the same period.
Market participants were caught off guard by the disappointing figures and are now anticipating U.S. data to provide more clarity on the impact of elevated cocoa prices on demand. Nevertheless, losses were tempered by reports of exporters in Ivory Coast overpaying suppliers to meet targets amid a weaker production forecast for the 2024/25 season.
Sugar: a resilient recovery
March white sugar futures surged by $12.50, or 2.6%, closing at $485.00 per ton after hitting a three-year low of $470.50 on Wednesday. In India, sugar mill shares rallied following reports of potential ethanol price increases under government review. Since ethanol is primarily derived from sugarcane in India, increased ethanol production could reduce sugar output.
Raw sugar prices also rebounded, rising by 2.2% to reach 18.41 cents per pound, recovering from a four-and-a-half-month low of 17.92 cents.
Coffee markets: mixed signals
Arabica coffee futures declined by 1%, settling at $3.2715 per pound, after gaining 2.6% on Wednesday. Concerns linger about how last year’s dry weather in Brazil might affect the 2025 crop. While Brazil exported a record 50.4 million 60-kg bags of coffee in 2024, December shipments were down 10.5% year-on-year, and industry experts do not foresee record exports repeating this year.
Robusta coffee futures dropped 0.5%, closing at $4,889 per ton. In Vietnam, the world’s leading Robusta producer, coffee prices dipped as farmers released larger quantities of beans ahead of the Lunar New Year celebrations.
Market outlook
The futures markets for cocoa, sugar, and coffee are experiencing varied trends, driven by factors ranging from global demand shifts to regional production challenges. As key economic data emerges and production levels stabilize, traders will be closely watching for signs of market direction in the weeks ahead.
Cocoa: demand weakens globally
London cocoa futures dropped by 217 pounds, equivalent to a 2.5% decline, closing at 8,529 pounds per metric ton. Similarly, New York cocoa futures fell by 2.9%, settling at $10,502 per ton. European fourth-quarter cocoa grind data showed a notable 5.4% year-on-year decline, with Asia reporting a marginal 0.52% drop. Brazil’s cocoa processing fell even further, down 5.5% during the same period.
Market participants were caught off guard by the disappointing figures and are now anticipating U.S. data to provide more clarity on the impact of elevated cocoa prices on demand. Nevertheless, losses were tempered by reports of exporters in Ivory Coast overpaying suppliers to meet targets amid a weaker production forecast for the 2024/25 season.
Sugar: a resilient recovery
March white sugar futures surged by $12.50, or 2.6%, closing at $485.00 per ton after hitting a three-year low of $470.50 on Wednesday. In India, sugar mill shares rallied following reports of potential ethanol price increases under government review. Since ethanol is primarily derived from sugarcane in India, increased ethanol production could reduce sugar output.
Raw sugar prices also rebounded, rising by 2.2% to reach 18.41 cents per pound, recovering from a four-and-a-half-month low of 17.92 cents.
Coffee markets: mixed signals
Arabica coffee futures declined by 1%, settling at $3.2715 per pound, after gaining 2.6% on Wednesday. Concerns linger about how last year’s dry weather in Brazil might affect the 2025 crop. While Brazil exported a record 50.4 million 60-kg bags of coffee in 2024, December shipments were down 10.5% year-on-year, and industry experts do not foresee record exports repeating this year.
Robusta coffee futures dropped 0.5%, closing at $4,889 per ton. In Vietnam, the world’s leading Robusta producer, coffee prices dipped as farmers released larger quantities of beans ahead of the Lunar New Year celebrations.
Market outlook
The futures markets for cocoa, sugar, and coffee are experiencing varied trends, driven by factors ranging from global demand shifts to regional production challenges. As key economic data emerges and production levels stabilize, traders will be closely watching for signs of market direction in the weeks ahead.