New York cocoa futures on ICE rebounded this week, recovering from a sharp decline.
July New York cocoa (CCc2) settled up $156, or 2.2%, to $7,322 per metric ton. This follows a nearly 20% drop on Monday.
Dealers highlighted the extreme volatility in cocoa prices as the market attempts to stabilize after a significant fall of about 40%.
Prices plummeted from a record high of $11,722 on April 19 to a low of $6,990 on May 3.
Fundamentals remain supportive for cocoa, with forecasts predicting a large global deficit in the 2023/24 season due to poor crops in major producers Ivory Coast and Ghana.
Below-average rains in Ivory Coast’s main cocoa regions last week could impact the April-to-September mid-crop season if dry conditions persist.
July London cocoa (LCCc2) also saw a rise, increasing by 2.5% to 6,149 pounds per ton.
Sugar prices under pressure
In contrast, raw sugar prices slumped to an 18-month low before recovering slightly by the end of the session.
July raw sugar (SBc1) settled up 0.24 cents, or 1.3%, at 18.87 cents per pound after hitting a low of 18.31 cents earlier in the day.
Dealers attributed the decline in sugar prices to the robust pace of sugar production in Brazil’s Centre-South region, combined with necessary rains in Thailand and India.
A U.S. broker noted that the market is under pressure due to dry weather in Brazil enabling full-speed crushing operations, diminishing any risk premium related to dry conditions in Thailand.
The sugar industry group UNICA is expected to release data on CS Brazil’s sugar production for the second half of April in the coming days, with an anticipated year-on-year increase of about 50%.
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