LONDON: Cocoa futures on the ICE exchange edged away from recent 3-1/2 month highs on Friday, but were still heading for weekly gains of more than 20percent, while arabica coffee edged up off its recent 1-1/2 year low.

COCOA

New York cocoa fell 0.9percent to USD4,386 a metric ton at 1153 GMT, having hit a 3-1/2 month high of USD4,554 on Thursday. Supportive technical factors have been driving cocoa prices this week, but dealers said speculators might, for now, be done reducing their short positions or bets on price falls.

Fundamentals remain increasingly supportive though, with high fertiliser prices sparking concern over lower global output next season.

“The last time fertiliser prices surged was in the wake of the Russia-Ukraine war, and that, coupled with poor growing weather, resulted in a sharp drop in production,” said broker ADMIS.

In news, Ghana’s state-owned cocoa buyer is unable to purchase cocoa from farmers after accumulating 673 million cedis (USD60 million) in debt that left it facing an asset seizure, a company source told Reuters.

“Reports that Ghana’s farmers have yet to be paid raise additional concerns about their ability to purchase (fertilisers and pesticides) for upcoming harvests,” said ADMIS.

London cocoa fell 0.8percent to 3,269 pounds per ton after hitting a 3-1/2 month high of 3,414 pounds on Thursday.

COFFEE

Arabica coffee rose 1.4percent to USD2.7720 per lb after setting a 1-1/2 year low of USD2.7135 on Thursday, with an

expected bumper Brazil crop this year set to alleviate some tightness in supplies.

Against that, however, the Brazilian real is hovering near its highest in two years against the dollar, limiting the incentive for local exporters to sell by lowering their returns in local currency terms.

Robusta coffee rose 0.8percent to USD3,461 a ton, heading for gains of 3percent this week. Traders in top robusta grower Vietnam are reportedly reluctant to sell, dealers said.

SUGAR

Raw sugar dipped 0.1percent to 14.52 cents per lb, heading for losses of 3percent this week. Weaker oil prices are exerting downward pressure on sugar, dealers said.

Lower energy prices reduce the incentive to use cane to make biofuel ethanol and can therefore encourage producers to increase sugar production. White sugar lost 0.4percent to USD430.30 a ton.—Reuters