SOFTS-Cocoa Rebounds from 2.5-Month Low, According to Reuters

Cocoa prices found stability after experiencing a sharp decline of approximately 6 percent in a previous session, largely due to ongoing tensions in the major cocoa-producing nation of Ivory Coast. Meanwhile, coffee prices continued to weaken, driven by technical selling, while raw sugar prices inched upwards amidst prospects concerning the harvest in Brazil.

On March 30, reports indicated that forces loyal to Alassane Ouattara, the presidential claimant in Ivory Coast, had advanced closer to key port cities, escalating an offensive against incumbent president Laurent Gbagbo. Should Ouattara’s forces gain control of the San Pedro port, it would facilitate the resumption of cocoa exports that have been hindered by an export ban.

Market analysts suggest that there is an anticipation of a swift resolution to the conflict, which could consequently lead to increased cocoa shipments from the Ivory Coast. Keith Flury, a senior analyst at Rabobank, highlighted that this scenario could rapidly draw cocoa supplies into the market. The ongoing export ban, European Union sanctions, and a faltering local banking system have left over 450,000 tonnes of cocoa in storage, raising concerns about quality deterioration.

May cocoa futures witnessed a modest rise of $3, reaching $3,060 per tonne after hitting a low of $2,993, the lowest point since mid-January. Despite the potential for swift cocoa exports, uncertainty remains regarding the rapid reopening of the affected ports, particularly due to the slow nature of decision-making within the EU.

In the coffee market, Arabica futures experienced a slight decline due to technically-driven selling, despite underlying supportive factors. May Arabica coffee fell by 0.90 cents, or 0.3 percent, to $2.6055 per pound, marking a roughly 12 percent drop since its peak on March 9. Analysts noted that speculative trading had driven prices up previously, with roasters now taking a step back amid the sell-off spurred by broader commodity market trends following the earthquake in Japan. However, Arabica prices are supported by a shortage of high-quality beans, and a bullish outlook is anticipated for the next season.

Robusta coffee futures also saw a decrease, sliding $26 or 1.0 percent to $2,484 per tonne. In raw sugar, prices increased slightly as attention turned to Brazil’s harvest outlook, which has faced challenges due to rain that has affected early harvest efforts. May raw sugar rose 0.4 percent to 27.12 per pound, while May white sugar futures dropped $2.50 to $700.00 per tonne.