Bloomberg News

Cocoa Futures Fall on Increased Supplies From Ivory Coast, Ghana

October 11, 2011

Oct. 11 (Bloomberg) -- Cocoa futures fell the most this month on speculation that supplies from the Ivory Coast and Ghana will exceed demand for a second straight year.

While the global surplus will narrow from last season’s record 325,000 metric tons, producers will harvest more than the world consumes in the 2011-2012 season, according to Jean-Marc Anga, executive director of the International Cocoa Organization. Exports from Ivory Coast’s port of San Pedro more than doubled to 26,094 tons in September from 10,034 tons a year earlier, the harbor said in a report yesterday.

“There’s plenty of supply out there, which continues to weigh on prices,” Thomas Mikulski, a senior strategist at Lind- Waldock, a broker in Chicago, said by telephone. “Ghana and the Ivory Coast had huge crops this year.”

Cocoa for December delivery fell 2 percent to settle at $2,604 a ton at 2 p.m. on ICE Futures U.S. in New York, the biggest decline since Sept. 30. In London, cocoa futures for December delivery retreated 1.1 percent to 1,688 pounds ($2,633) a ton on NYSE Liffe.

The dollar rose as much as 0.6 percent against a basket of six major currencies, eroding the investment appeal of U.S. commodities, after slumping yesterday the most since May 2009.

The premium buyers in the European market are willing to pay for cocoa from Ghana, the world’s largest producer after Ivory Coast, fell to 90 pounds to 100 pounds a ton above London futures, three people involved in the trade said Oct. 7. That compares with 100 pounds on Sept. 21, three traders said at the time.

“Given the better-than-expected supply of cocoa in the 2011-12 season, and the market momentum, prices are poised for correction,” Keith Flury, an analyst at Rabobank International in London, said in an e-mail today. “Origin selling and the seasonal price fall will pressure the terminal markets.”

--With assistance from Cecilia Yap in Manila and Tony Dreibus in London. Editors: Steve Stroth, Patrick McKiernan

Claudia Carpenter at Ccarpenter2@bloomberg.net.

To contact the reporter on this story: Blair Euteneuer in Chicago at beuteneuer@bloomberg.net Isis Almeida in London at Ialmeida3@bloomberg.net

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net


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