Cocoa Drops on Demand Concerns

Cocoa prices fell Friday after data from the National Confectioners Association showed a drop in the amount of cocoa beans ground in North America in the fourth quarter.

Cocoa for March delivery shed 2.7% to $1,931 a ton after breaching $2,000 earlier in the week on the ICE Futures U.S. exchange.

Cocoa grind data is used to gauge demand for the main ingredient in chocolate. Analysts said the drop adds to concerns that the market is well supplied, limiting possible price gains. North America is one of the world's largest consumers of cocoa.

"Rallies just can't get anything above key levels," said Geordie Wilkes, a research analyst at Sucden Financial. "You've got a lot of oversupply at the moment."

In other markets, March raw sugar added 1.3% to 13.25 cents a pound. The Indian Sugar Mills Association revised higher its estimate for sugar production in the country for the 2017-18 season to about 26 million tonnes, a potentially bearish development because India is one of the world's largest producers. Supply concerns have recently weighed on sugar prices.

"However, with consumption estimated at 25 [million tonnes], there is the potential for Indian sugar exports," ING analysts said in a note to clients.

Elsewhere, March arabica coffee closed up 0.1% at $1.2125 a pound, March frozen concentrated orange juice advanced 0.9% to $1.4650 a pound and March cotton climbed 1% to 83.42 cents a pound.

Write to Amrith Ramkumar at amrith.ramkumar@wsj.com

(END) Dow Jones Newswires

January 19, 2018 14:59 ET (19:59 GMT)