Cocoa Seen Gaining as Dry Weather Curbs Output; Sugar Declines
Cocoa may rise in New York on speculation dry weather will curb production in West Africa, supplier of about two-thirds of the world’s crop. Sugar fell.
Ghana’s western region, the largest growing area of the second-biggest producer, got 4.5 millimeters (0.2 inch) of rain in three towns monitored from Aug. 1 to Aug. 10, data from the Ghana Meteorological Agency showed. That compares with 35.4 millimeters a year earlier. Cocoa has climbed 16 percent this year in New York on speculation a developing El Nino will bring more dry weather, curbing supplies.
“The outlook for cocoa heading into 2013 remains a decidedly bullish one,” Shawn Hackett, president of Hackett Financial Advisors Inc., said in a report e-mailed yesterday. “Persistent dry weather in West Africa has the potential to crater production potential.”
Cocoa for December delivery was little changed at $2,409 a metric ton by 6:41 a.m. on ICE Futures U.S. in New York. Earlier it rose as much as 0.6 percent to $2,423 a ton. An increase to $2,500 a ton would signal a bull market, Hackett said. The beans were little changed at 1,611 pounds ($2,538) a ton on NYSE Liffe in London.
Biggest grower Ivory Coast had below average rainfall in the southwestern Soubre region, which produces about 300,000 tons of cocoa a year, according to data from the country’s National Meteorological Service. It produced 1.36 million tons this season, according to Ecobank Transnational Inc. (ETI), the Lome, Togo-based lender.
The next 30 days will be important for crop development, Hackett said. The 2012-13 cocoa season should have a “small global deficit,” according to a Aug. 17 report by Ecobank. That may boost prices in the next few months, it said.
Raw sugar for October delivery fell 0.4 percent to 20.41 cents a pound in New York. White, or refined, sugar for October delivery declined 0.7 percent to $562 a ton in London.
Arabica coffee for December delivery rose 0.4 percent to $1.6515 a pound on ICE. Robusta coffee for November delivery was little changed at $2,103 a ton NYSE Liffe.
To contact the editor responsible for this story: Claudia Carpenter at email@example.com