Arabica coffee prices fell to a three-week low on Wednesday, extending their retreat from a record high earlier this month, while cocoa prices surged amid volatile market conditions.
Arabica coffee futures settled down 0.7 cents, or 0.2%, at $3.752 per pound, after hitting a three-week low of $3.6630. Traders attributed the decline to a market correction following the sharp rally in early 2025, which saw prices reach a record high of $4.2995 per pound.
“The technical indicators suggest further downside pressure in the near term,” brokerage firm Sucden Financial noted in a report.
Robusta coffee futures were little changed at $5,410 per metric ton.
Meanwhile, coffee and tea giant JDE Peet’s exceeded market expectations for its 2024 operating profit, but warned of a slight decline in 2025, citing rising coffee bean costs as a key challenge.
Cocoa futures in New York surged $425, or 4.8%, to $9,230 per ton, recovering from Monday’s three-month low of $8,308.
Despite the rally, prices remain down 16% in 2025 amid ongoing market fluctuations.
Investor sentiment was buoyed by strong earnings from Guan Chong Bhd, Asia’s largest cocoa processor, which reported a near-doubling of revenue in 2024 to 10.44 billion ringgit ($2.36 billion). The company stated that it has successfully passed higher raw material costs onto consumers.
In London, cocoa futures gained 4.9% to 7,451 pounds per ton.
Raw sugar futures fell 0.82 cents, or 3.8%, to 20.64 cents per pound, reversing part of the gains made in the previous session, when prices reached a two-month high of 21.57 cents.
Traders noted weakness in the March contract ahead of its expiry on Friday, with the premium to the May contract <SB-1=R> falling to 1.19 cents from 1.43 cents on Tuesday.
Market analysts cited dry weather in Brazil and lower-than-expected sugar output in India as key drivers of recent price volatility.
“Weather conditions in Brazil are expected to remain dry and hot over the next two weeks, which could further impact production,” Rabobank said in a report.
White sugar futures declined 1.6% to $554.70 per ton.
($1 = 4.4260 ringgit)