(NASDAQ) – Cocoa prices fell sharply Friday as speculators dropped out of the market over fears that economic turmoil from Britain’s exit from the European Union could blunt demand for the main ingredient in chocolate from its largest consuming region.
Cocoa for September delivery dropped 5.1% to end at $3,023 a ton on the ICE Futures U.S. exchange, on track for their biggest percentage drop in 4 1/2 years.”It’s just liquidating,” said Peter Mooses, senior market strategist, at RJO Futures in Chicago,
Citi Research says over the last three decades, a stronger pound has led to higher cocoa prices. Money managers were largely bullish on cocoa leading up to the vote for that reason. Mr. Mooses said several clients were eyeing $3,400 a ton. Now, he said, it looks like $3,200 a ton is more realistic for cocoa prices in the near-term if demand from Europe isn’t hard-hit by the U.K.decision.
In other markets, raw sugar for October fell 0.2% to end at 19.16 cents a pound, arabica coffee for September was down 4% to settle at $1.3715 a pound, frozen concentrated orange juice futures were down 0.9% to close at $1.70 a pound and December cotton fell 1.5% to end at 64.42 cents a pound.
