Bloomberg News

Ghana Cocoa Premium Said to Drop With Ivorian Trade Declining

May 11, 2012

The premium paid for cocoa from Ghana, the second-largest producer, fell in the past two weeks as higher prices for nearby delivery encouraged sales, according to three traders with direct knowledge of the sales.

Ghanaian beans in the European market cost 75 pounds ($121) to 85 pounds a metric ton more than futures on NYSE Liffe in London, according to the traders, who declined to be identified because they’re unauthorized to speak to the media. The premium was 85 pounds to 90 pounds on April 27.

Cocoa futures for May delivery are 14 pounds a ton more expensive than the July contract, data on Bloomberg show. That means traders have less incentive to store beans. The contracts moved into the so-called backwardation yesterday.

The premium in Europe for Ghanaian beans from the next crop starting in October was unchanged at 90 pounds to 95 pounds a ton, the traders said.

There was little trading of cocoa from Ivory Coast in the European market because the mid-crop, the smaller of two annual harvests that usually starts in April, is delayed, according to the traders. Harvesting will start “soon,” the International Cocoa Organization said in a report this week.

Ivorian beans from the new season were trading in Europe at a premium of 55 pounds to 85 pounds depending on the shipment period, three traders involved in the sales said.

Cocoa for July delivery fell 0.2 percent to 1,539 pounds a ton on NYSE Liffe today.

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

To contact the editor responsible for this story: Claudia Carpenter at Ccarpenter2@bloomberg.net.


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