Cocoa Futures Slide to Near 1-Month Lows

(Wall Street Journal) – Cocoa prices slid to near one-month lows on Wednesday as investors continued to take profits from the market’s recent run up amid the start of West Africa’s harvest.

The main cocoa-harvesting season in the world’s top-growing region began in earnest this month, which means market participants are anticipating the availability of more supplies. In addition, concerns that the deadly Ebola outbreak in West Africa could reach Ivory Coast or Ghana, which together produce about 60% of the world’s cocoa, have somewhat dissipated.

No cases of the virus have been reported in either country, but Ivory Coast shares a border with Liberia and Guinea, two of the countries hardest hit by Ebola. Prices for the key chocolate ingredient had surged to 3 1/2-year highs late last month as investors and traders built an “Ebola premium” into the market.

Cocoa for delivery in December on ICE Futures U.S. ended down 0.4% at $3,083 a ton on Wednesday, the lowest settlement since Sept. 11.

“The past two weeks have seen the cocoa price correct part of the 30% surge in price it has experienced since the beginning of the year,” Commerzbank said in a note. “Higher prices for cocoa farmers and favorable weather conditions had given rise to optimism regarding the coming crops in West Africa and driven concerns about the spread of Ebola into the background.”

In other markets, arabica coffee for delivery in December ended down 0.9% at $2.1445 a pound, while raw sugar for March delivery closed at 16.92 cents a pound, down 0.7% on the day. December-delivery cotton ended 0.5% lower at 65.51 cents a pound, and orange juice for November delivery closed up 0.1% at $1.4320 a pound.