(Businessweek) – Cocoa fell to a 10-month low in London, on speculation rain in Ivory Coast, the world’s largest producer, will boost supplies. Sugar advanced and coffee slid.
Most regions of Ivory Coast got above-average rainfall on Feb. 21 to Feb. 28, according to data compiled by Bloomberg from the country’s National Meteorological Service. Central-western Daloa, which produces about 300,000 tons of cocoa a year, got 28.1 millimeters (1.1 inches) of rain, the data show. The lonng-term average is 26 millimeters.
“Widespread rains have arrived in West Africa, providing welcome relief to cocoa producers,” Kona Haque, an analyst at Macquarie Group Ltd. in London, said in a report e-mailed today.“This is likely adding to the bearish near-term sentiment.”
Cocoa for May delivery fell 0.9 percent to 1,393 pounds ($2,095) a ton by 11:13 a.m. on NYSE Liffe in London. The commodity used to make chocolate dropped to 1,390 pounds, the lowest since April 12. Cocoa for May delivery slid 1 percent to $2,061 a ton on ICE Futures U.S. in New York.
Rainfall of as much as 40 millimeters to 50 millimeters is forecast for most of Ivory Coast and Ghana, the second biggest grower, through March 11, according to data on the website of the U.S. National Oceanic and Atmospheric Administration.
Cocoa demand will be 45,000 tons higher than supplies in the 2012-13 season started Oct. 1, the International Cocoa Organization estimates. That follows a surplus of 86,000 tons in 2011-12. Output in Ivory Coast will be 1.47 million tons in 2012-13, down from 1.486 million tons a year earlier, according to the London-based cocoa group. Ghana’s production will be about 820,000 tons in 2012-13, according to the ICCO.
“The ICCO appears to be confirming a suspicion that has already been simmering on the market for some time: the expectation, initially to be heard frequently, that the deficit could turn out to be around the 100,000-ton mark, is likely to have been pitched significantly too high,” Carsten Fritsch, a commodities analyst at Commerzbank AG in Frankfurt, said in a report e-mailed today.
White sugar for May delivery was 0.1 percent higher at $514.50 a ton in London. Raw sugar for May delivery gained 0.5 percent to 17.99 cents a pound in New York.
Robusta coffee for delivery in May was down 0.3 percent to $2,109 a ton on NYSE Liffe. Arabica coffee for delivery in May fell 0.2 percent to $1.43 a pound on ICE.
