Cocoa Rises on Ivory Coast Sanctions; Sugar, Coffee Advance

Cocoa climbed for a second straight session in New York after the European Union imposed sanctions against Ivory Coast, the world’s biggest producer, signaling supplies may be limited. Sugar and coffee also rose.

EU-registered ships are barred from new financial transactions with Ivory Coast’s main cocoa ports in Abidjan and San Pedro under sanctions started last week. Cocoa in London returned to “backwardation,” a sign of concern about supply, after the EU action, according to Javier Almela, chief purchasing manager at Spanish cocoa buyer Natra SA.

“This political development is perking up the market,” said Hector Galvan, a senior trading adviser at RJO Futures in Chicago. The EU said the cocoa trade was helping to fund the “illegitimate” government of Laurent Gbagbo.

Cocoa futures for March delivery rose $17, or 0.6 percent, to settle at $3,036 a metric ton at 11:59 a.m. on ICE Futures U.S. in New York. The most-active contract advanced 5.9 percent last week.

In London, cocoa futures for March delivery climbed 5 pounds, or 0.2 percent, to 2,010 pounds ($3,209) a ton on NYSE Liffe, 10 pounds more than the May contract. March-delivery cocoa yesterday became more expensive than the May contract for the first time since July 21. Backwardation occurs when near- term contracts cost more than distant ones.

Sugar, Coffee

Raw-sugar futures for March delivery rose 0.23 cent, or 0.7 percent, to 31.12 cents a pound in New York, after falling as much as 1.2 percent. In London, refined-sugar futures for March delivery climbed $6, or 0.8 percent, to $780.20 a ton.

Sugar output in Brazil’s Center South, the world’s largest producing region, slumped 81 percent in the second half of December from a year earlier, industry association Unica said today.

Arabica-coffee futures for March delivery gained 0.75 cent, or 0.3 percent, to $2.3535 a pound in New York. Robusta- coffee futures for March delivery advanced $7, or 0.3 percent, to $2,147 a ton on NYSE Liffe.

(Source: http://www.bloomberg.com/news/2011-01-18/cocoa-gains-after-eu-imposes-ivory-coast-sanctions-sugar-erases-advances.html)