Bloomberg News

Cocoa Falls as Ivorian Rain Adds to Weak Grindings; Coffee Drops

July 15, 2013

Cocoa fell for a second day in New York as bean processing in Europe was weaker than analysts anticipated and rain in Ivory Coast eased concern dry weather would hurt the development of the next crop. Coffee retreated.

Cocoa grinding in Europe, an indication of demand, rose 6.1 percent in the second quarter, the Brussels-based European Cocoa Association said on its website today. That’s lower than the 8.3 percent gain expected by 10 traders, brokers and processors surveyed by Bloomberg. Thunderstorms were expected from Ivory Coast eastward to Nigeria and Cameroon through yesterday, with daily rainfall amounts ranging from 0.2 inch to 0.7 inch, AccuWeather Inc. said in a report on July 12.

“A combination of slightly weaker European grind and the fact that it’s been raining in Ivory Coast probably got the market on the defensive this morning,” Jonathan Parkman, co-head of agriculture at futures and options brokerage Marex Spectron Group Ltd., said by phone from London today.

Cocoa for September delivery retreated 0.6 percent to $2,223 a metric ton by 8:02 a.m. on ICE Futures U.S. in New York. Cocoa for September delivery was little changed at 1,546 pounds ($2,325) a metric ton on NYSE Liffe in London.

Bean processing in Europe amounted to 310,408 tons from April to June, ECA data showed. That’s higher than the 292,551 tons ground in the same period a year earlier and lower than the 339,377 tons in the first three months of the year. The ECA survey had 21 participants in the second quarter, down from 25 a year earlier, data from the group showed.

Grindings

“The ECA grind was marginally worse than expected, but with the non-reporting factories, it’s really hard to gauge what’s actually going on,” Parkman said. “Allowing for the non-reporters, we estimate the grind is actually up about 10 percent on the same quarter, which is a pretty decent performance really.”

Cocoa processing in Malaysia fell 3.1 percent to 72,191 tons in the second quarter, according to an e-mailed statement from the Malaysian Cocoa Board. That compares with 74,493 tons in the same period a year earlier. Grindings in Malaysia were slightly stronger than expected, he said.

Arabica for delivery in September was down 0.1 percent to $1.1925 a pound on ICE. Robusta coffee for September delivery fell 0.6 percent to $1,864 a ton in London.

Raw sugar for delivery in October was down 0.1 percent to 16.05 cents a pound on ICE. White sugar for October delivery fell 0.1 percent to $460.90 a ton on NYSE Liffe.

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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