Nov. 2 (Bloomberg) -- Cocoa prices rose the most in 10 weeks as European leaders try to preserve their bailout for Greece, easing concern that a faltering global economy will erode commodity demand.
European officials are convening emergency talks today to tell Greece there is no alternative to budget cuts. Equities and raw materials rallied, recovering some of the losses this week prompted by plans for a Greek referendum that threatened to unravel the rescue effort. Today, the dollar’s drop increased the investment appeal of commodities.
“After yesterday’s huge sell-off, there’s a corrective bounce, being helped by the macro situation,” Luis Rangel, a vice president of commodity derivatives at ICAP Futures in Jersey City, New Jersey, said in a telephone interview. “The lack of fresh bad news is allowing the dollar to pull back and allowing commodities in general to recover.”
Cocoa for December delivery gained 2.5 percent to settle at $2,665 a metric ton at 1:02 p.m. on ICE Futures U.S. in New York, the biggest gain for a most-active contract since Aug. 23. The price has tumbled 29 percent from a 32-year high of $3,775 on March 4.
In London futures trading, cocoa advanced on NYSE Liffe.
Developments with Europe’s debt crisis will determine demand for cocoa, Spencer Patton, the chief investment officer for Steel Vine Investments in Chicago, said in a telephone interview.
“If Europe continues to have a crisis, demand for luxuries like chocolate will go down,” Patton said. “If they solve the crisis, demand will go up. Right now, all eyes are on Europe.”
--Editors: Millie Munshi, Patrick McKiernan
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