Cocoa futures climbed on Thursday after the Ivory Coast signalled the country's physical supply glut may be easing, while raw sugar fell sharply on technical pressure. May New York cocoa was up $9, or 0.45 percent, at$2,004 a tonne by 1500 GMT, after gaining nearly 2 percent in earlier trading. May London rose 5 pounds, or 0.31 percent, to 1,614 pounds a tonne.
The market was supported by more clarity around a wave of defaults in the Ivory Coast, after authorities said on Wednesday the Coffee and Cocoa Council (CCC) had auctioned off around 350,000 tonnes of cocoa from defaulted contracts and excess production. A wave of defaults by exporters who wrongly speculated that world prices would continue to rise has created a cocoa glut, with local farmers unable to find buyers for their beans.
Dealers said the news triggered some short covering and profit taking, since it signalled that the majority of reselling has potentially already been done. However, one dealer noted gains are limited by ample supplies and an enduring bearish outlook.
= "It may have been helpful to clarify the muddy waters," he said. "But once that immediate short covering is done, there isn't exactly much in the way of follow up demand. We basically fall back into a hole." March raw sugar futures were down 0.49 cents, or 2.37 percent, at 20.19 cents per lb, after falling to a session low of 20.15.
Dealers said the slump was driven by selling on the back of weak technicals, as prices dipped below the 10-day, 40-day and 100-day moving average. "A (sell) stop hit another stop and then it cascaded all the way down," said one dealer. "But there's no fresh news out there really. Once again, we're stuck in this very tight range." May white sugar was down $10.10, or 1.8 percent, at $550.40 a tonne.
However, the white premium remained strong, hovering near three-month highs touched this week on expectations India will allow imports of white sugar later this year. Robusta coffee was marginally higher, with the May contract up $3, or 0.14 percent, at $2,164 a tonne as the market consolidated yesterday's losses. Futures fell 1.3 percent on Wednesday, after Brazil backtracked on plans to allow robusta imports from Vietnam for the first time. May arabica rose 1.20 cents, or 0.80 percent, to$1.521 per lb, supported by the robusta squeeze.