(Businessweek) – Cocoa fell in London and New York on speculation prices that rallied yesterday climbed too far as rainfall may favor crop development in West Africa, the main growing region. Raw sugar rose in New York.
Cocoa gained 2 percent in London and 1.9 percent in New York yesterday as the pound fell to a six-week low against the dollar after a report showed U.K. inflation slowed more in April than economists forecast. Cocoa growing areas in West Africa got widespread rainfall last week, with the heaviest amounts over southwestern Cameroon and southern Ivory Coast, MDA Weather Services, in Gaithersburg, Maryland, said in a report e-mailed yesterday.
“Cocoa prices recovered in New York as a break in the British pound sponsored some buying pressure in London,” Sterling Smith, an analyst at Citigroup Inc. in Chicago, said in a report e-mailed yesterday. “With no pressing weather issues, we have reservations about this near-term strength.”
Cocoa for delivery in July fell 0.2 percent to 1,566 pounds ($2,365) a ton by 11:36 a.m. on NYSE Liffe in London. Cocoa for July delivery retreated 0.6 percent to $2,330 a ton on ICE Futures U.S. in New York.
U.K. consumer prices rose 2.4 percent from a year earlier, compared with 2.8 percent in March, according to the Office for National Statistics. The median forecast of 35 economists in a Bloomberg News survey was 2.6 percent. The pound fell as much as 0.9 percent to $1.5113, the lowest since April 4.
Robusta coffee futures for July delivery were little changed at $2,010 a ton in London. Arabica coffee futures for July delivery fell 0.4 percent to $1.3215 a pound in New York.
White, or refined, sugar for delivery in August was unchanged at $476.30 a ton on NYSE Liffe. Raw sugar for delivery in July rose 0.2 percent to 16.89 cents a pound on ICE. The sweetener has dropped 9 percent in London and 13 percent in New York this year.
“Sugar prices are likely to stay under pressure as the Brazilian crop is gathering speed,” F.O. Licht said in a report dated yesterday. “The fact that millers in the center south continue to concentrate on sugar instead of ethanol as was generally expected, is undermining sentiment further.”
