LONDON: London cocoa futures on ICE were lower on Friday and on track for a weekly loss of about 28%, though the pace of the decline appeared to be slowing.

COCOA

July London cocoa fell 1.5% to 6,454 pounds a metric ton by 1118 GMT, extending the market’s slide from a record high of 9,980 pounds set on April 19. The market is on track for a weekly loss of 28%.

Dealers said the fall was driven by fund liquidation of long positions, sparked partly by rising margin calls, and that fundamentals remained supportive with poor crops in West Africa leading to a large global deficit in the 2023/24 season.

“It’s important to underscore that the recent downturn in cocoa prices is primarily a result of trading manoeuvres, not a realignment of market fundamentals, and we expect this heightened volatility to persist as prices stay at historically high levels,” BMI analysts said in a note. July New York cocoa fell 1.2% to $7,470 a ton.

The July contract could slide further into a range of $6,680-$6,901, driven by a wave E, according to Reuters market analyst Wang Tao.

COFFEE

July robusta coffee was 0.7% lower at $3,655 a ton, extending the market’s fall from last week’s record high of $4,338. Dealers said funds had been liquidating long positions but fundamentals remain supportive, with dryness in top robusta producer Vietnam still a major concern.

There was some rain in Vietnam this week, but it was not sufficient to make a significant impact and there already appears to be some damage to crops in DakLak and Gia Lai provinces, they added.

July arabica coffee rose 0.7% to $2.0745 per lb.

SUGAR

July raw sugar rose 0.7% to 19.39 cents per lb. Dealers said concern that hot weather in Thailand could damage sugarcane crops provided some support. August white sugar was up 0.6% at $574 a ton.