Coffee and Cocoa Fall on Profit-Taking, Sugar Hits 2010 Lows

Coffee and cocoa traders faced sharp losses on January 22, 2013, as profit-taking swept through the commodities markets. The sell-off pushed prices down sharply, with sugar futures nearing their lowest levels since 2010. This movement followed a long U.S. weekend and reflected growing supply concerns, especially in the sugar sector.

In short: On January 22, 2013, 3 Arabica coffee futures dropped 4.41% to $1.494 per pound—their biggest drop in over two months—while sugar hit levels last seen in August 2010. ICE cocoa futures also fell over 3%, marking some of the steepest single-day declines in weeks.

Why Coffee and Cocoa Futures Fell Sharply

Trading opened under heavy selling pressure as investors took profits after recent highs. “Today is the start of the week, and there’s some profit-taking. It’s a snowball effect,” said Hector Galvan, Senior Market Strategist at RJOFutures. That selling quickly gained momentum, leading to steep declines across multiple contracts.

Key Price Moves on January 22, 2013

• 3 Arabica Coffee (NY): Fell 6.9 cents (4.41%) to $1.494 per pound—the lowest for a near-month contract since November 20, 2012, and potentially the biggest one-day drop since November 20.
• 3 Robusta Coffee (ICE): Dropped $2 (0.1%) to $1,968 per tonne, retreating from a high of $1,989 reached on Friday, November 2.
• ICE 3 Cocoa: Declined $73 (3.15%) to $2,213 per tonne, its largest one-day fall in three months after peaking at a one-month high on Friday.
• London 5 Cocoa: Closed down £32 (2.2%) at £1,448 per tonne.

Sugar Falls to 2010 Lows on Oversupply Fears

Sugar markets remained under intense pressure. ICE 3 Raw Sugar slipped 0.07 cent (0.38%) to 18.30 cents per pound, briefly touching 18.25 cents—the lowest for a near-month contract since August 2010. London’s 3 White Sugar also dropped, falling $3.7 (0.76%) to $486.1 per tonne, briefly hitting $485.5—the lowest since June 2010.

The decline in sugar was driven by expectations of a large upcoming harvest in Brazil, the world’s top producer. With the current crushing season winding down, attention has turned to the new season, which is forecast to exceed the already high production levels of 2012/13.

What Determines These Commodity Moves

Commodity prices in coffee, cocoa, and sugar are highly sensitive to shifts in supply outlooks, seasonal trading patterns, and investor positioning. In this case:

• Recent highs attracted profit-taking, accelerating downward moves.
• Sugar’s decline was worsened by anticipated oversupply from Brazil’s next harvest.
• Cocoa and coffee both saw technical corrections after approaching multi-month peaks.

Frequently Asked Questions

Why did coffee and cocoa prices drop so much on January 22, 2013?

Prices fell due to widespread profit-taking after recent highs, with 3 Arabica coffee dropping 4.41% to $1.494 per pound and ICE 3 cocoa declining 3.15% to $2,213 per tonne. The moves were described as the result of a “snowball effect” of selling.

How low did sugar futures go on that day?

ICE 3 raw sugar futures touched 18.25 cents per pound, the lowest level for a near-month contract since August 2010. London’s 3 white sugar also hit 485.5 dollars per tonne, a low last seen in June 2010.

What triggered the selloff in these commodities?

The selloff was driven by profit-taking after a strong run-up in prices, technical corrections, and concerns over increasing global supply—especially for sugar, with a large Brazilian harvest expected.

Were there specific numbers for the declines in coffee futures?

Yes: 3 Arabica fell 6.9 cents to $1.494 per pound (4.41%), and 3 Robusta dropped $2 to $1,968 per tonne (0.1%). Both experienced their sharpest drops in months.

What role did Brazil play in sugar price movements?

Brazil, the largest sugar producer, was nearing the end of its current harvest season, with traders shifting focus to the new season, which is expected to surpass the high-output 2012/13 crop—adding to oversupply fears.

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