Cocoa prices rose17 February 2012
LONDON: The price of cocoa rose on the third day after the London market trader of raw materials based in Singapore, Olam International Ltd. said the price of cocoa has the potential to rise in line with demand higher than supply.
Olam CEO Sunny Verghese said the processing of cocoa as an indication of demand, grew significantly earlier than expected and the price tends to rise. Gerry Manley, managing director and chief representative in London in December Olam estimating dive 2011-2012 season will occur the supply deficit of 100,000 tons.
Zug report a division of Tiberius Asset Management AG wrote “We hold excess [demand] in coffee and cocoa”. The institution would predict a higher cocoa prices in line with expectations on production cuts and deficit global market.
Price of cocoa for March delivery rose 0.7% to 1489 pounds sterling (U.S. $ 2,336) per ton at 10.30 yesterday on the NYSE LIFFE in London. Price touched the 1501 pound, the highest since February 6. The price of cocoa for May delivery rose 0.8% to U.S. $ 2,288 per ton on ICE Futures U.S., New York.
Antoine Koffi Kouassi, engineers agrometeorologi National Service said that dating harmattan winds from the desert blowing stronger than usual. Mid-season harvest is usually smaller than the two annual harvest generally begins in April. “Loss of harvest in West Africa is a real threat because of the bad weather forecast.”
Marex commodity broker Spectron Group estimates that the crop in the Ivory Coast will be 1.34 million tons, while the supply of the 2010-2011 season reached 1.7 million tons.
Cocoa prices rose 3% in London and 5.9% in New York, in line with the action of short-covering ahead of first notice of expiration of the March contract on ICE Futures U.S. yesterday. Holders of futures contracts should tell whether they intend to receive physical delivery. Short-covering show the purchase to close bets on lower prices.
Investment funds and other large speculators increased net-short position or net selling them on cocoa futures in New York, according to data the U.S. Commodity Futures Trading Commission on February 7. Buying and selling positions rose to 6496 a contract above positions, or 299% from the previous week.