Bloomberg News

Cocoa Drops as Ivorian Arrivals Signal More Supply; Coffee Rises

December 05, 2013

Cocoa declined for a third day in London, the longest losing streak in more than three weeks, as bean deliveries in top producer Ivory Coast signal bigger supplies than traders anticipated. Coffee advanced.

Cocoa bean arrivals at ports in Ivory Coast advanced 45 percent from the start of the season on Oct. 1 through Dec. 1 compared with a year earlier, according to KnowledgeCharts, a unit of Commodities Risk Analysis in Bethlehem, Pennsylvania. West Africa, which accounts for about 70 percent of the world’s cocoa output, will get less rain in the next two weeks, favoring the harvest, Andy Karst, a meteorologist at World Weather Inc. in Overland Park, Kansas, said yesterday.

Ivorian arrivals are “suggesting that things may not be as tight as the numbers suggest,” brokerage INTL FCSTone Inc. (INTL:US) said in a monthly report e-mailed yesterday. “Over the course of December, we see prices trading between $2,570 a ton, the November intraday low, while on the upside, the $3,000 mark looks to be next logical resistance.”

Cocoa for delivery in March fell 0.5 percent to 1,728 pounds ($2,828) a metric ton by 11:25 a.m. on NYSE Liffe in London. Cocoa for the same month slid 0.4 percent to $2,757 a ton on ICE Futures U.S. in New York. ICE futures trading volumes 67 percent below the average for the past 100 days for the time of day, data compiled by Bloomberg showed.

The beans used to make chocolate gained 23 percent in New York this year as supplies are set to outpace demand for a second year in the 2013-14 season. Production may fall short of consumption by 100,000 tons, according to FCStone. That follows a shortage of 160,000 tons in 2012-13, the International Cocoa Organization in London estimates. Cocoa is the best performer in the Standard & Poor’s GSCI gauge of 24 raw materials.

Sell-Off

Deficit forecasts “should be music to the ear of the producers, but as we have seen many times in the tropicals, strong rallies just invite more plantings and basically sow the seeds for the next major sell-off,” FCStone said.

Robusta coffee for delivery in January gained 0.7 percent to $1,708 a ton on NYSE Liffe. Arabica coffee for delivery in March was 0.4 percent higher at $1.088 a pound on ICE.

Refined, or white, sugar for March delivery was unchanged at $450 a ton in London. Raw sugar for the same month was unchanged at 16.68 cents a pound in New York.

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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    (INTL. FCStone Inc)
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