Ivory Coast, the world’s largest cocoa producer, offered to sell beans for shipment in the 2014-15 season after futures traded on the NYSE Liffe exchange in London entered a bull market earlier this month.
Beans for shipment from October to December 2014 were offered at yesterday’s auction at a minimum price of 1,309 CFA francs ($2.69) a kilogram (2.2 pounds), according to data on the website of industry regulator Le Conseil du Cafe-Cacao. That would mean a premium of about 38 pounds ($61) a metric ton to the March 2015 futures, according to Bloomberg calculations.
Cocoa entered a bull market on Sept. 5 and rose to 1,700 pounds a ton on Sept. 16, the highest level in almost a year. In New York, futures entered a bull market last month and are this year’s best performer in the Standard & Poor’s GSCI gauge of 24 raw materials followed by cotton and crude.
“It looks like they are taking advantage of the higher prices,” Kona Haque, a London-based analyst at Macquarie Group Ltd. (MQG), Australia’s biggest investment bank, said by phone today, commenting on the sales offers. “Prices need to stay high to accelerate selling and to dampen short-term demand.”
Global cocoa supplies will fall short of demand by 195,000 tons in the 2013-14 season starting next month, Damien Thouvenel, a trader at Paris-based Sucres et Denrees SA, said in a Sept. 12 interview. That follows a shortage of 155,000 tons this season. Processing will gain 3 percent to 5 percent in 2013-14, Peter B. Johnson, chief executive officer at grinder Euromar Commodities GmbH, said in an interview the same day.
Chocolate sales will rise 6.2 percent to a record $117 billion next year, estimates Euromonitor International Ltd., a consumer research company in London. Demand for chocolate in China will expand 11 percent annually in the five years to 2018, 13 percent in Brazil, 22 percent in India and 8 percent in Eastern Europe, according to the Hershey Co. (HSY:US), maker of Hershey Kisses and Reese’s Peanut Butter Cups.
Cocoa for December delivery fell 0.1 percent to 1,673 pounds a ton by 11:08 a.m. in London. Prices fell as much as 1.8 percent yesterday.
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