Cocoa Climbs to a Five-Month High as Ivory Coast Exports May Be Disrupted

Cocoa rose to a five-month high in London on speculation steps to remove the incumbent president in the Ivory Coast, the largest grower, will disrupt bean exports. Prices rose to an eight-month high in New York.

European Union financial sanctions ban most trade between the block and the Ivory Coast. The country’s internationally recognized president may lobby for a total trade ban with his country, the Wall Street Journal reported today. Ivory Coast’s crop will be 1.9 percent larger than last year, accounting for a third of global bean production, Macquarie Group Ltd. estimates.

“There clearly is a fear the cocoa gets stuck over there,” said Eric Sivry, head of the agricultural options brokerage at Marex Financial Ltd. in London.

Cocoa for March delivery climbed 29 pounds, or 1.4 percent, to 2,157 pounds ($3,435) a metric ton by 11:57 a.m. in London on NYSE Liffe, and earlier today rose to 2,169 pounds, the highest price for a most-active contract since Aug. 10. In New York, the futures rose to as high as $3,232 a ton, the most since May 5.

Ivory Coast bean shipments since the harvest started Oct. 1 are lagging behind the pace of a bigger crop, with arrivals at ports about 2 percent below last season, Macquarie said in a Jan. 19 report. It estimates an Ivory Coast cocoa crop of almost 1.32 million tons, up from 1.29 million tons a year earlier.

Cocoa prices were not getting support from the North American grind figures, which were considered “a little on the low side,” Sivry said. Bean processing in the fourth quarter rose 4.6 percent from a year earlier, the National Confectioners Association said yesterday.

Cocoa Fire

Archer Daniels Midland Co. is “assessing the situation” after a fire at its cocoa-processing plant north of Amsterdam on Jan. 19, spokeswoman Sara Vermeulen-Anastasi in Rolle, Switzerland, said by phone today.

“The ADM fire does not seem to have affected stockpiles and although there is a lot of discussion about the fire, this is not the main concern for prices at the moment,” Sivry said.

In London, white, or refined, sugar for March delivery climbed $11.30, or 1.5 percent, to $779.60 a ton and robusta coffee for March delivery rose $30, or 1.4 percent, to $2,145 a ton. In New York, raw sugar for March delivery was little changed 31.3 cents a pound and arabica coffee for March delivery climbed 2.9 cents, or 1.3 percent, to $2.347 a pound.

(Source: http://www.bloomberg.com/news/2011-01-21/cocoa-climbs-to-a-five-month-high-as-ivory-coast-exports-may-be-disrupted.html)