Cocoa rises to two-month high
Sunday, 25 April 2010
LONDON, April 24 (Bloomberg): Cocoa rose to the highest price in more than two months on speculation that a global production shortfall will worsen as demand strengthens. Coffee also gained.
Output will trail consumption by 124,000 tonnes in the year ending Sept. 30, compared with a March estimate of 110,000 tonne, Fortis Bank Nederland NV and VM Group said today in a report. The world's cocoa-bean processors may grind almost 3.6 million tons in the period, up 3.3 per cent.
"The wider deficit is largely the result of an across-the- board rise in grindings for all regions save Africa," Fortis and VM said. They cited "very strong" evidence that demand from processors is rebounding from a drop of more than 6 per cent last year.
Cocoa for July delivery rose $59, or 1.9 per cent, to $3,198 a ton on ICE Futures US in New York, after touching $3,211, the highest price for a most-active contract since Jan. 29. The 7 per cent gain this week was the biggest since October.
In London, cocoa for May delivery gained 1.8 per cent to 2,305 pounds ($3,543) a ton on the Liffe exchange, after touching 2,320 pounds, the highest level since Feb. 15.
"The market gains are being supported by reports of below- average rainfall for the first 20 days of April in Ivory Coast's main growing regions," Luis A. Rangel, an ICAP Futures trader in Jersey City, New Jersey, said yesterday in a report. "A recent dry spell in Nigeria was also becoming a concern."
Ivory Coast is the world's largest cocoa producer, followed by Ghana, Indonesia and Nigeria.
First-quarter cocoa grindings in North America rose 16 per cent from a year earlier, the National Confectioners Association said on April 15. In Europe, usage jumped 8.1 per cent, according to the European Cocoa Association.
The chocolate ingredient has jumped 30 per cent from a year earlier in New York. London futures have climbed 25 per cent in the past year, including a 5.7 per cent gain this week, the biggest advance since Nov. 20.
Output will trail consumption by 124,000 tonnes in the year ending Sept. 30, compared with a March estimate of 110,000 tonne, Fortis Bank Nederland NV and VM Group said today in a report. The world's cocoa-bean processors may grind almost 3.6 million tons in the period, up 3.3 per cent.
"The wider deficit is largely the result of an across-the- board rise in grindings for all regions save Africa," Fortis and VM said. They cited "very strong" evidence that demand from processors is rebounding from a drop of more than 6 per cent last year.
Cocoa for July delivery rose $59, or 1.9 per cent, to $3,198 a ton on ICE Futures US in New York, after touching $3,211, the highest price for a most-active contract since Jan. 29. The 7 per cent gain this week was the biggest since October.
In London, cocoa for May delivery gained 1.8 per cent to 2,305 pounds ($3,543) a ton on the Liffe exchange, after touching 2,320 pounds, the highest level since Feb. 15.
"The market gains are being supported by reports of below- average rainfall for the first 20 days of April in Ivory Coast's main growing regions," Luis A. Rangel, an ICAP Futures trader in Jersey City, New Jersey, said yesterday in a report. "A recent dry spell in Nigeria was also becoming a concern."
Ivory Coast is the world's largest cocoa producer, followed by Ghana, Indonesia and Nigeria.
First-quarter cocoa grindings in North America rose 16 per cent from a year earlier, the National Confectioners Association said on April 15. In Europe, usage jumped 8.1 per cent, according to the European Cocoa Association.
The chocolate ingredient has jumped 30 per cent from a year earlier in New York. London futures have climbed 25 per cent in the past year, including a 5.7 per cent gain this week, the biggest advance since Nov. 20.