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West Africa, the world’s largest cocoa-producing region, will get rains over the next six days, potentially helping pod development as harvesting of the smaller of two annual crops starts in Ivory Coast, according to the U.S. National Oceanic and Atmospheric Administration.
Most of top growers Ivory Coast and Ghana will get at least 20 millimeters (0.7 inch) of rain by May 28, data on the NOAA website show. The western region of Ivory Coast will get 30 to 40 millimeters in the period. Coastal areas in Ghana will receive at least 30 millimeters, the data showed. The two countries accounted for 69 percent of global production last season, according to the London-based International Cocoa Organization.
Rains may favor pod development after dry weather earlier this year delayed harvesting of the Ivorian mid-crop. The mid- crop, which usually starts in April, has begun and is off to a slow start this year, Laurent Pipitone, director of the economic and statistics division at the ICCO, said last week.
“Cocoa specialists mentioned that the rain levels, despite being ‘adequate,’ were still slightly below historical averages,” Eric Sivry, London-based head of the agriculture options brokerage at Marex Spectron Group, said in a report e- mailed today. “They added that West African crops would be delayed.”
Cocoa prices will climb in the third and fourth quarters because of “tighter fundamentals” and concerns about supply from Ivory Coast as the country implements a reform of its cocoa industry, according to Rabobank International. The changes include a plan to sell 70 percent of the 2012-13 crop before the harvest starts in October. The forward sales began on Jan. 31.
Cocoa will average 1,600 pounds ($2,523) a ton in London in the third quarter and 1,700 pounds in the following three months, Rabobank estimates. Demand will outpace supplies by 89,000 tons next season, the bank said in a report e-mailed yesterday.
The commodity was down 0.2 percent to 1,536 pounds a ton by 11:18 a.m. on NYSE Liffe 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.