Cocoa futures slumped Wednesday, on track for a second-straight session of declines, as the market stays range-bound following a steady year of losses.
Cocoa for September was down 0.6% at $2,007 a ton on the ICE Futures U.S. exchange.
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The cocoa market has seen steep declines following a year in which crops far exceeded expectations, moving the cocoa market from a deficit to a surplus.
Rotterdam-based Cocoanect said it expects the 2016/2017 cocoa surplus to be 393,000 tons, a swing of 589,000 tons from the previous year when the cocoa market was in a deficit.
"With futures down over 40% from the 2016 peaks, it is understandable that the market seems to be taking a pause, as the lull of the summer months passes by," the firm said.
The firm said that reduced farmer income in Ivory Coast and Ghana, the world's two largest cocoa producers, has led to significant declines in fertilizer sales, which could leave the 2017/2018 crop vulnerable to weather risks.
However, the firm said, even with production declines and consumption growth due to lower prices for cocoa buyers, it anticipates that producers will add to this year's surplus stocks in the coming year.
In other markets, raw sugar for October fell 0.7% to 13.68 cents a pound, arabica coffee for September was up 0.4% at $1.4325 a pound, frozen concentrated orange juice for September rose 0.8% to $1.3265 a pound and December cotton lost 0.1% to 71.04 cents a pound.
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(END) Dow Jones Newswires
August 09, 2017 11:36 ET (15:36 GMT)