(Businessweek) – Cocoa fell in London and New York on speculation Ivory Coast, the world’s largest producer, may still have a lot of its crop to sell. Sugar retreated.
Ivory Coast is lagging behind with sales of its current crop, according to Macquarie Group Ltd., Australia’s biggest investment bank. The African country, which reformed its cocoa sector last year, plans to sell 70 percent to 80 percent of every crop before the harvest starts. The 2012-13 season began Oct. 1 and the main crop is now ending. A smaller crop, known as the mid-crop, will be gathered starting in April.
“Although the main crop in Ivory Coast is tailing off, the government is behind in its forward selling,” Kona Haque, an analyst at Macquarie in London, wrote in the report. “This is discouraging speculators from adding long exposure to this market given the higher risks for origin selling coming in at every price strength and capping upside in the short term.”
Cocoa for delivery in March fell 0.6 percent to 1,414 pounds ($2,192) by 11:02 a.m. a ton on NYSE Liffe in London. Cocoa for delivery in May declined 0.7 percent to $2,155 a ton on ICE Futures U.S. in New York.
Cocoa buyers have enough beans to cover their needs for more than eight months and so they aren’t willing to buy futures when prices rise, Haque said. Dry winds that blow from the Sahara desert, known as Harmattan, were “not severe by historical standards” and therefore the mid-crop development is“decent.”
“Prices may remain weak short term, before rallying again in the second half, by which point most of the origin selling should be over,” she said.
Robusta coffee for delivery in May gained 0.5 percent to $2,103 a ton on NYSE Liffe. Arabica coffee for May delivery dropped 0.3 percent to $1.412 a pound on ICE.
White, or refined, sugar for delivery in May dropped 0.6 percent to $492.50 a ton in London. Raw sugar for delivery in May declined 0.9 percent to 18.03 cents a pound on ICE.
