Ivory Coast Seen Selling 60% of Next Cocoa Crop in Survey

(Bloomberg) – Ivory Coast, the world’s leading cocoa producer, already may have sold 60 percent of total output forecast for the 2013-14 season, according to a Bloomberg survey and Macquarie Group Ltd. (MQG)

Cocoa sales by the West African nation’s industry regulator Le Conseil du Cafe-Cacao, known as CCC, may have reached 845,000 metric tons, the mean in a Bloomberg survey of 15 brokers, traders, analysts and processors showed. Farmers in Ivory Coast will reap 1.42 million tons of cocoa in the season starting in October, down from 1.455 million tons in 2012-13, estimates Kona Haque, a London-based analyst at Macquarie Group Ltd., Australia’s biggest investment bank.

“The next crop has been pretty well sold this far in advance and should take some harvest pressure off the market,” said Jack Scoville, a vice president at Price Futures Group Inc. in Chicago. “That means less downside potential this fall and maybe somewhat higher prices later into the winter.”

Ivory Coast implemented changes to the cocoa sector last year that include selling part of the crop before harvesting starts and setting a fixed price to be paid to farmers. The sales are made through twice-daily auctions. Cocoa for shipment from October to December was for sale at today’s morning auction at a minimum price of 1,276 CFA francs ($2.59) a kilogram (2.2 pounds), CCC data showed. That equates to a premium of 30 pounds ($47) a ton over the December futures in London.

Cocoa for September delivery jumped 5.2 percent this week on NYSE Liffe and yesterday reached 1,685 pounds a ton, the highest for the contract since Sept. 17. There is concern that West African crops will be delayed and reduced by dry weather and that Ivory Coast already sold much of next season’s crop.

Stressed Crops

Ivory Coast’s Daloa region, which produces about 300,000 tons of cocoa a year, got 0.1 millimeter (0.004 inch) of rain from July 21-31, according to the National Meteorological Service. That compares with the long-term average of 42 millimeters. Dryness is set to persist in Ivory Coast and Ghana, continuing to stress crop development, MDA Weather Services in Gaithersburg, Maryland, said in a report e-mailed yesterday.

Ghana, the world’s second-biggest producer, offered to sell beans from its next crop this week as futures rallied, three traders with direct knowledge of the sales said yesterday. The Ghana Cocoa Marketing Co., which manages sales on behalf of industry regulator the Ghana Cocoa Board, offered beans at a premium of about 80 to 90 pounds a ton above the price of the May futures traded on NYSE Liffe, said the traders.

Cocoa for September delivery fell 0.4 percent to 1,649 pounds ($2,559) a ton by 1:40 p.m. in London.