Bloomberg News

Ivory Coast Cocoa Premium Is Seen at as Much as 85 Pounds

May 18, 2012

Ivory Coast cocoa from the season starting in October was at a premium of as much as 85 pounds ($134) a metric ton on speculation shipments may be delayed.

The premium for Ivorian beans in Europe to the price on the NYSE Liffe exchange in London ranged from 45 pounds, depending on the shipment period and on the quality agreed, according to three traders with direct knowledge of the sales, who declined to be identified because they aren’t authorized to speak to the media. A higher premium was being charged for shipments in the fourth quarter, the traders said.

There are concerns the implementation of a new selling system in Ivory Coast will lead to “substantial” delays in exports, Jonathan Parkman, co-head of agriculture at broker Marex Spectron Group in London, said last month.

Ivory Coast, the biggest grower, plans to sell 70 percent of its 2012-13 crop before the harvest starts as part of wider industry reforms. The so-called forward sales started on Jan. 31 even as some details of the reform still need to be finalized.

An agreement with cocoa exporters over transportation and handling fees will be reached by Sept. 15, Agriculture Minister Mamadou Sangafowa Coulibaly said this week.

Cocoa from the current crop in Ivory Coast is not trading in Europe as the main crop has ended, the traders said. The smaller of two annual harvests, known as the mid-crop, is “off to a slow start,” according to Laurent Pipitone, director of the economic and statistics division at the International Cocoa Organization in London.

Beans from the current crop in Ghana, the second-largest producer, were trading in Europe at a premium of 75 pounds to 85 pounds a ton, unchanged from last week, the traders said. Cocoa from the new crop was at a premium of 90 pounds to 100 pounds a ton, from 90 pounds to 95 pounds a ton last week.

Premiums for the new crop in Ghana may be supported by potential export delays in Ivory Coast, the traders said.

Cocoa for July delivery rose 1.6 percent to 1,552 pounds a ton by 3:34 p.m. in London.

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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