Cocoa Reaches 3-Yr High on Concerns That Ebola May Spread
Category: Cocoa
(Bloomberg) – Cocoa futures extended a rally to a three-year high in New York and London amid concerns that shipments from top producer Ivory Coast could be disrupted should an outbreak of Ebola spread to the West African country.
The Ebola epidemic in West Africa may reach almost 21,000 cases by November if control efforts aren’t intensified quickly, according to an estimate by the World Health Organization‘s Ebola response team published in the New England Journal of Medicine today. While no cases have been reported in Ivory Coast, the disease has spread in bordering Liberia and Guinea.
“There’s no doubt about it, Ebola is one of the driving factors” for cocoa, Edward George, head of research at Lome, Togo-based Ecobank Group, said by phone today. “Everyone has been talking about Ebola for a long time, but I think people are starting to realize the implications of what could happen.”
Cocoa futures for December delivery rose 0.7 percent to $3,351 a metric ton at 7:32 a.m. on ICE Futures U.S. in New York. Earlier today the price touched $3,357, the highest for a most-active contract since March 2011. Cocoa for the same delivery month on Liffe in London climbed as high as 2,150 pounds ($3,524) a ton, also the highest since March 2011. The commodity on both exchanges has climbed about 24 percent this year.
Cocoa prices also were supported by concern that production won’t be sufficient from the next main crop in Ivory Coast to meet rising demand for chocolate globally, George said. The International Cocoa Organization expects a world surplus of cocoa at 40,000 tons in 2013-14, the agency said Aug. 29, after previously forecasting a deficit of 75,000 tons.
Rising Demand
“There is a fear that this coming-up main crop is not going to be very good,” George said. “In which case, because we’ve seen so much demand rising across the world, there’s an expectation of a shortage.”
Arabica coffee for December delivery rose 1.8 percent to $1.827 a pound in New York. Robusta coffee for November delivery added 0.8 percent to $1,951 a ton in London, poised for the first increase in five sessions.
Raw sugar for March delivery rose 1.3 percent to 15.84 cents a pound in New York. White sugar for December delivery increased 1 percent to $413.70 a ton in London.
