New York cocoa futures on ICE tumbled more than $100 per tonne on Friday, on concerns about possible low-quality beans in the United States, while raw sugar slumped nearly 6 percent on profit-taking in the final minutes of the trading session. December New York cocoa settled down $96, or 4.2 percent, at $2,219 per tonne, after falling $110 to $2,205. It closed the week lower for the third straight week.
In addition to 157 lots from Ivory coast, 10 lots of cocoa from Cameroon were delivered against the September contract, which expired on Thursday. Certified stock from Cameroon reached 2,080 bags, up sharply from just 160 bags a year prior, ICE data show. "I think you're going to start seeing more of that coming here and it's not a desirable bean," one US trader said, about cocoa from Cameroon.
"That is going to break the arbitrage where New York will go back to a discount to London," the trader said. The unusual December New York premium over London fell to roughly $140, from around $170 two sessions prior. December London cocoa settled down 49 pounds, or 3 percent, at 1,584 pounds per tonne, the lowest since Aug. 6.
October raw sugar settled down 0.52 cent, or 4.5 percent, at 11.16 cents per lb, the spot contract's biggest one-day drop since June 4. It dropped 5.8 percent to 11 cents in the last two minutes of trade. The steep decline was due to profit-taking from the prior session's two-month high and technically overbought levels on the relative strength index, traders said.
Also weighing on prices was the approaching expiry of October options on Monday, with heavy open interest and activity in 11-cent puts, traders said. Still, the spot contract closed the week higher for the fourth straight week. Fundamentally, talk that India may soon agree to subsidize exports as it deals with a supply glut following a rise in production provided additional pressure, they said.
December white sugar settled down $10.90, or 3.1 percent, at $339.70 per tonne. A small delivery against the October contract, which expired on Friday when it closed down 1.1 percent at $328.90 - a $10.80 discount to December - was expected after most positions were liquidated the last few days. December arabica coffee settled down 0.95 cent, or 0.9 percent, at 99.7 cents per lb. November robusta coffee settled down $11, or 0.73 percent, at $1,489 per tonne.