Cocoa Advances to 32-Year High on Concern About Curbed Ivory Coast Supply
Cocoa rose to the highest price since 1979 in New York on speculation escalating violence will limit supplies from Ivory Coast, the world’s largest producer.
The country’s ambassador to the United Nations appealed yesterday for stronger action by the peacekeeping mission in Ivory Coast to prevent violence. The nation is in the midst of a standoff as incumbent President Laurent Gbagbo refuses to step down in favor of Alassane Ouattara, the internationally recognized winner of a November election.
“With Ivory Coast on the brink of a civil war, cocoa nearby values have rallied,” Rabobank International said in a report late yesterday as it raised price forecasts for every quarter of this year. “Supply risk is high.”
Cocoa for May delivery climbed $14, or 0.4 percent, to $3,747 a metric ton at 7:31 a.m. on ICE Futures U.S. in New York. Prices reached $3,775, the highest level for a most-active contract since January 1979.
Nearer-dated futures trade above contracts with later dates for all of 2011 in New York and London, a so-called backwardation that may signal concern about supply. Rabobank raised its average estimates for New York-traded cocoa in the first through fourth quarters of this year to $3,400 a ton, $3,000, $2,700 and $2,650.
“The deteriorating situation in Ivory Coast is expected to result in reduced quality of beans in the short term and may lower the coming harvest potential,” the bank said.
Cocoa for May delivery was unchanged at 2,396 pounds ($3,901) a ton on NYSE Liffe in London after adding as much as 1.2 percent to 2,425 pounds, the highest price for a most-active contract since July 19.
Ambassador Youssoufou Bamba, who was appointed by Ouattara, asked the UN Security Council to authorize a “more robust mandate” for the 9,000 soldiers and civilian police deployed in Ivory Coast. Security forces loyal to Gbagbo killed eight women participating in a protest, a spokesman for an opposition group supporting Ouattara said.
Arabica coffee for May delivery rose 0.7 percent to $2.767 a pound in New York. Robusta coffee for May delivery advanced 0.6 percent to $2,397 a ton on NYSE Liffe.
Raw sugar for May delivery climbed 0.2 percent to 30.65 cents a pound on ICE. White, or refined, sugar for May delivery gained 0.5 percent to $761 a ton in London.
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