BLBG:Cocoa Futures Gain on Lack of Rain in Ivory Coast; Coffee, Sugar Decline
Cocoa rose for the seventh time in eight sessions on concern that cold, dry weather may reduce harvests in parts of Ivory Coast, the world’s biggest producer. Sugar and coffee futures dropped.
Farmers in Ivory Coast are set to begin cocoa harvests in October. “We need a mix of sunny spells and rain, but instead it’s been overcast for weeks, and it’s really cold for the time of year,” said Michel Adjei, head of a farmers’ cooperative that produced about 4,000 tons in the 2010-2011 season.
“This will be viewed as negative for the cocoa-pod seeds,” said Erica Rannestad, a commodity analyst at CPM Group in New York.
Cocoa for December delivery gained $41, or 1.4 percent, to settle at $3,045 a metric ton as of 2 p.m. on ICE Futures U.S. in New York, after touching $3,053, the highest since Aug. 17. In London, cocoa futures for December delivery rose 28 pounds, or 1.5 percent, to 1,917 pounds ($3,157) on the NYSE Liffe, after touching 1,921 pounds, the highest since July 22.
“We will see some support to prices, but they will not go too high the next couple of weeks,” because output may rise from a year earlier, CPM’s Rannestad said. “Considering that world production is so concentrated, any news on weather, country risk or underinvestment could have an impact.”
Ivory Coast reaped a record cocoa crop last year that was about 40 percent of the world total. Production in 2010-2011 from Ivory Coast and Ghana, the top growers, will increase, boosting total output from West Africa by 25 percent, the International Cocoa Organization said on Aug. 11. Global harvests will exceed usage by 362,250 tons in the year ending Sept. 30, analysts in a Bloomberg survey said.
Arabica-coffee futures for December delivery fell 1.5 cents, or 0.6 percent, to settle at $2.6835 a pound on ICE.
Raw-sugar futures for October delivery declined 0.17 cent, or 0.5 percent, to 30.79 cents a pound in New York. Earlier, prices reached 31.65 cents, the highest since July 25.
In London, refined sugar and robusta coffee gained.
To contact the reporter on this story: Marvin Perez in New York at mperez71@bloomberg.net
To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net
