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03.02.2009 Business & Finance

Cocoa price drops in London as Ivory Coast increases exports

By Bloomberg

Cocoa fell for a second session in London on increased supply from Ivory Coast, the world's biggest producer.

Arrivals of beans for export at the Ivorian ports of Abidjan and San Pedro jumped 67 percent to 50,171 metric tons in the week ended Jan. 25, an industry official with access to the information said today. The official, who declined to be identified because the figures are confidential, based them on information provided by the state-run Bourse du Cafe et du Cacao.

The “next few weeks of Ivory Coast arrivals will be crucial not only in determining the actual size of the main crop, but also the direction of the market” for cocoa, Brussels-based Fortis forecast in a Jan. 30 report.

Cocoa for March delivery fell 23 pounds, or 1.2 percent, to 1,972 pounds ($2,816) a metric ton at the close on the Liffe exchange. The chocolate ingredient is the best performer in the UBS Bloomberg CMCI index for the past year.

A “weak Harmattan,” or dry wind, in cocoa areas of Ivory Coast and Ghana may increase stress to the developing mid-crop, Meteorologix LLC reported today.

Net-Long Positions
Hedge-fund managers and other large speculators increased their so-called net-long position in New York cocoa futures in the week ended Jan. 27, according to U.S. Commodity Futures Trading Commission figures.

Speculative long positions, or bets prices will rise, outnumbered short positions by 21,119 contracts on ICE Futures U.S., formerly known as the New York Board of Trade, the Washington-based commission said in its Commitments of Traders report.

Among other agricultural commodities, robusta coffee for March delivery dropped $12, or 0.7 percent, to $1,665 a ton. White sugar rose $6.40, or 1.7 percent, to $379.90 a ton.

Four of eight traders, analysts and brokers surveyed last week by Bloomberg forecast that raw sugar traded in New York would rise this week. Two predicted a drop, and another two were neutral. Five of eight surveyed also said white sugar traded in London would gain, while two expected a decline and one person forecast little change.

Source: Bloomberg