Cocoa futures took a significant hit recently, plummeting to four-month lows on the ICE exchange. This decline comes amid a notable surge in ICE-certified stocks and optimistic weather predictions for West Africa, which have combined to create a challenging environment for cocoa traders. As the week wrapped up, cocoa prices reflected losses exceeding 5%, raising concerns among investors and market analysts.

Cocoa Market Trends

• In London, cocoa futures settled at 6,082 pounds per metric ton, marking a 4.1% decrease, and reflecting a 7% drop over the week, following an 11% decline the previous week.
• The recent spike in ICE-certified stocks is noteworthy, as they reached their highest levels since early January, just ahead of the expiration of the front month cocoa contract.
• Weather conditions are looking promising for cocoa-producing regions like the Ivory Coast, Ghana, and parts of southern Nigeria, with rain expected to increase towards the end of the forecast period.

On the New York market, cocoa prices fell by 3.7%, closing at $7,867 per ton. This drop adds to a 5% decline over the week, following a 9% loss in the prior week.

Coffee Market Insights

• The Arabica coffee market saw a decline of 8.5 cents, or 2.2%, settling at $3.772 per pound. Over the week, prices fell by 1.8%.
• In contrast, Robusta coffee prices decreased by 2.4%, closing at $5,397 per ton, which still reflects a 1% increase for the week.
• According to a report by Rabobank, both Arabica and Robusta coffee stocks are expected to rise in the coming weeks, as trading parity has been observed across various origins recently. This increase in stocks could exert downward pressure on coffee prices in the near future.
• Additionally, broker Marex noted that Brazilian coffee exports in February fell below the five-year monthly average for the first time since December 2023.

Sugar Market Dynamics

• Raw sugar futures experienced a slight drop, settling down 0.06 cents, or 0.3%, at 19.19 cents per pound, although it managed to gain 4.8% over the week.
• Ongoing concerns over rainfall in Brazil, a major sugar producer, are contributing to market volatility, along with diminishing production expectations in India. The Indian Sugar Mills Association has revised its forecast, now estimating 26.4 million metric tons of sugar production for the current season, which is a 2.94% decrease from earlier predictions.
• White sugar prices increased by 0.5%, reaching $541.50 per ton, marking a 3.1% gain for the week.

As the markets continue to fluctuate, traders and investors are advised to keep a close watch on weather patterns and stock levels, which will undoubtedly influence pricing trends in the weeks to come.