Feb. 15 (Bloomberg) -- Cocoa surged the most in three weeks after Olam International Ltd., a Singapore-based commodity trader, said the price has “more upside” with global demand forecast to outpace supplies. Coffee fell, while sugar gained.
Cocoa processing has been “stronger than expected,” and the market will swing to a deficit in the 12 months that started Oct. 1 from a surplus a year earlier, Sunny Verghese, Olam’s chief executive officer, said yesterday. Prices also rose on concern that adverse weather may hurt crops in Ivory Coast and Ghana, the world’s biggest producers.
“We also expect to see higher prices for cocoa due to expectations of global-output reduction and a resulting global- market deficit,” Zug, Switzerland-based Tiberius Asset Management AG said yesterday in a report. “Harvest losses in West Africa are a real threat due to expected bad weather.”
Cocoa for May delivery jumped 5.3 percent to close at $2,391 a metric ton at 12:05 p.m. on ICE Futures U.S. in New York, the biggest gain for a most-active contract since Jan. 24. After the settlement, the price reached $2,410, the highest since Jan. 27.
Cocoa posted the biggest gain among the 24 raw materials in the Standard & Poor’s GSCI Spot Index. The price soared 11 percent in three days.
“Traders are hearing reports of big winds in western Africa,” Jack Scoville, a vice president at Price Futures in Chicago, said in a report. “That could hurt quality or cause cherries to drop off the trees. There are also reports that farmers are holding the crops in some areas and hoping for higher prices.”
Arabica-coffee futures for May delivery fell 1.7 percent to $2.0255 a pound in New York. The price dropped for the sixth straight session, the longest slump since late November.
Raw-sugar futures for May delivery rose 0.8 percent to 23.57 cents a pound on ICE.
In London futures trading, cocoa and robusta coffee gained on NYSE Liffe, while refined sugar fell.
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