SOFTS-London cocoa hits 1-1/2 year low as harvest gets underway, coffee heads lower
LONDON, Oct 7 (Reuters) - London cocoa futures on ICE hit their lowest in more than 1-1/2 years on Tuesday as dealers remained hopeful about harvest prospects in West Africa, while arabica coffee fell.
COCOA
London cocoa LCCc2 fell 2.1% to 4,309 pounds per metric ton at 1250 GMT, after hitting its lowest since last February at 4,240. The market fell 10% last week.
Indicating ample near-term supply, cocoa for December delivery last traded at a discount of 56 pounds/t versus March cocoa LCCc1-LCCc2. Moreover, it traded at a discount of 65 pounds/t versus cocoa for delivery in December 2026 LCCc1-LCCc6.
"At a similar market level a year ago, the (Dec/Dec) yearly spread was trading at (a premium of) 1,456 (pounds/t)," said a dealer.
Cocoa is under pressure as the West African harvest gets underway, while on the demand side, upcoming third-quarter cocoa grind data for Europe, North America and Asia is expected to show further declines.
New York cocoa CCc2 fell 2.2% to $6,161 a ton.
COFFEE
Arabica coffee KCc2 fell 1% to $3.6120 per lb, having settled down 2.5% on Monday.
The Brazilian and U.S. presidents agreed to meet in person soon after a friendly video call on Monday, Brazil's government said, boosting prospects for a thaw in bilateral relations that are at their worst in decades.
Traders expressed surprise that the market has not reacted much to the news, given it is waiting anxiously to see if the 50% U.S. tariff on Brazilian imports, which drove arabica prices to seven-month highs in September, could be lifted.
In news, Brazil exported 195,803 tons of green coffee in September, down from 243,101 tons a year ago, government data showed.
Also, Brazilian coffee growers reported a robust flowering in their fields, but said rain is needed for a good fruit load.
Robusta coffee LRCc2 fell 0.3% to $4,450 a ton.
SUGAR
Raw sugar SBc1 fell 1.8% to 16.50 cents per lb, having hit a two-month high earlier of 16.88 cents/lb.
White sugar LSUc1 fell 1.5% to $457.40 a ton.
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