ICE cocoa dropped to a two-week low on Wednesday in the largest single-session loss in nearly two years, following bearish export data and price news from top grower Ivory Coast and reassurances that Ebola was unlikely to spread to the country. Arabica coffee on ICE Futures US jumped for the fourth straight day on continued drought concerns in top producer Brazil, while raw sugar fell on news that cash delivery against the October contract contained large supplies.
ICE December cocoa closed down $117, or 3.6 percent, at $3,142 a tonne in high-volume trading, with sell-stop orders exaggerating losses. It was the biggest one-day drop since October 2012, after the Ivorian government raised price supports and released data showing increases in arrivals and exports. The government announced on Wednesday it would guarantee cocoa farmers 850 CFA francs ($1.63) per kilogram for the 2014/15 main crop, a 13 percent increase. "Absolutely it's going to increase supply. That's the huge drop we're seeing right now," said Michael Smith, president of T&K Futures and Options in Port Saint Lucie, Florida.
The contract hit $3,399, a high since April 2011, on Thursday, fuelled by worries that the Ebola outbreak could cut output if the disease reached Ivory Coast. The US Centers for Disease Control said after the market closed on Tuesday that Ebola outbreaks in nearby Nigeria and Senegal seemed contained. "We know there's cocoa there this year," Jack Scoville, a Vice President with Price Futures Group in Chicago, said of Ivory Coast.
March cocoa in London lost 74 pounds, or 3.6 percent, settling at 1,998 pounds a tonne. ICE arabica coffee surged 7.05 cents, or 3.6 percent, settling at $2.0040 per lb as dealers weighed the impact of a lack of recent rains in Brazil following an earlier drought on 2015/16 production. MDA Weather Services forecast on Wednesday below average rainfall in Brazil's coffee belt in the next 6-10 days.
Liffe November robusta coffee gained $62, or 3.1 percent, settling at $2,054 per tonne. ICE March sugar fell 0.41 cent, or 2.5 percent, settling at 16.04 cents a lb in the aftermath of the October contract expiry. The cash delivery against the October contract that expired on Tuesday totalled 528,600 tonnes, in line with expectations after talk of large deals in the cash market lifted prices 16 percent since mid-September. Liffe December white sugar closed down $3.80, or 0.9 percent, at $418.50 a tonne.