Bloomberg News

Cocoa Jumps Most Since October 2009 in N.Y.; Sugar, Coffee Gain

January 09, 2012

Jan. 9 (Bloomberg) -- Cocoa surged the most since October 2009 as a labor stoppage threatened to disrupt supplies from Nigeria, the world’s fourth-biggest producer. Sugar and coffee also advanced.

Nigerian workers began a national strike today, which may shut ports, after fuel costs more than doubled. Growers in the nation aren’t selling crops after prices paid to farmers fell more than 40 percent and the government’s removal of fuel subsidies left them facing higher costs, the head of the Cocoa Association of Nigeria said on Jan. 4.

Higher prices may lift costs for companies including Hershey Co., Nestle SA and Barry Callebaut AG, the world’s top bulk-chocolate maker. Last year, cocoa tumbled 31 percent, the largest annual loss since 1999, as output rose in Ivory Coast, the biggest grower.

“Whenever you see a country being immobilized, you run the risk of exports not moving at all,” Hector Galvan, a senior commodities broker at RJO Futures in Chicago, said in a telephone interview. “Nigeria is not Ivory Coast, but when all is said and done, it’s one of the top producers.”

Cocoa for March delivery jumped 7 percent to settle at $2,170 a metric ton at 12:02 p.m. on ICE Futures U.S. in New York, the biggest gain since Oct. 5, 2009.

Supplies will trail demand by 29,000 tons in the season started Oct. 1, Rabobank International forecast. If weather in West Africa turns “unconstructive,” the shortage may widen, the bank said in a report on Jan. 5. Ghana is the second-biggest producer, and Indonesia is third.

The European Cocoa Association will release fourth quarter statistics on grindings, a measure of demand, on Jan. 13.

Raw-sugar futures for March delivery rose 0.2 percent to close at 23.34 cents a pound in New York. The sweetener tumbled 27 percent last year as output climbed in Europe and Asia.

Arabica-coffee futures for March delivery increased less than 0.1 percent to $2.2185 a pound on ICE. The commodity fell 2.2 percent last week.

In London, cocoa, refined sugar and robusta coffee advanced on NYSE Liffe.

--With assistance from Chris Kay in Abuja and Emele Onu and Vincent Nwanma in Lagos. Editors: Steve Stroth, Daniel Enoch

To contact the reporter on this story: Marvin G. Perez in New York at mperez71@bloomberg.net

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


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