Cocoa futures fell on origin selling and arbitrage on Monday, while coffee and sugar consolidated, supported by a weak dollar, as markets focused on efforts to spur global economic activity. Following rate cuts last week from the Fed, China and Japan, the European Central Bank, Britain and Australia are expected to cut their interest rates by at least 50 basis points this week.
Cocoa fell on producer hedging and arbitrage as traders pondered grim demand prospects for cocoa and chocolate products, dealers said. "Consumption considerations are a major factor for cocoa right now," one cocoa dealer said. Benchmark ICE December cocoa futures were down $58, or 2.8 percent, at $1,995 per tonne at 1550 GMT, while London March cocoa was down 22 pounds, or 1.7 percent, to 1,309 pounds per tonne in modest volume of 3,926 lots.
Cocoa arrivals at ports in world No 1 grower Ivory Coast totalled around 88,000 tonnes from October 1 to November 2, sharply down from 226,151 tonnes received in the same period last season, exporters estimated on Monday. Coffee dealers said roaster buying was running into Vietnamese origin selling in robustas. Vietnam is the top robusta coffee producer. "Near term, the outlook is neutral. The fund position is fairly small," one London robusta coffee trader said.
January robusta coffee at 1551 GMT had risen $39, or 2.4 percent, to $1,642 per tonne in moderate volume of 6,592 lots. December arabicas reversed early gains and were down 0.15 cent, or 0.13 percent, to $1.1285 per lb. Vietnam's main agricultural area, including the Central Highlands coffee belt and the Mekong Delta rice basket, has not been affected by floods in the country, although rain disrupted coffee harvesting.
ICE raw sugar and London white sugar futures consolidated, buoyed by the weak dollar, as market participants anticipated further rate cuts this week. ICE March raw sugar traded up 0.10 cent, or 0.8 percent, to 12.12 cents a lb at 1553 GMT.
"Selling over 12.00 (cents) seems to be fairly consistent but not aggressive," said Peter Hoyt of UK broker Sucden in a daily sugar market report. London December white sugar was down $1.70, or 0.5 percent, to $332.50 per tonne in tiny volume of 1,050 lots. Dealers said tightening global supplies of the sweetener were likely to support prices into 2009.