Cocoa Swings in New York as Europe Processing Dips; Sugar Drops

Cocoa swung between losses and gains in New York after a rally yesterday and as data showed bean processing in Europe, the world’s main consuming region, remained weak. Sugar slid and coffee advanced.

Europe’s cocoa-bean processing fell 3.9 percent in the first quarter, the Brussels-based European Cocoa Association said in a report today. While that’s bigger than the drop of 2.4 percent expected by traders in an April 9 Bloomberg survey, it shows a recovery from the 6.2 percent decline in the previous three months and from the retreat of 16 percent in the third quarter. Futures climbed 6.7 percent in New York and 5.2 percent in London this month partly on technical indicators.

“While Europe is facing particular issues, other areas of the globe should be able to pick up the slack,” Sterling Smith, a futures specialist at Citigroup Inc. in Chicago, wrote in a report e-mailed yesterday. Global consumption of cocoa is “on an upward path,” he said.

Cocoa futures for July delivery were unchanged at $2,316 a ton on ICE Futures U.S. in New York by 5:59 a.m. They fell as much as 0.7 percent and gained as much as 0.1 percent earlier today. Futures trading volumes were 76 percent higher than the average for the past 100 days for this time of day, according to data compiled by Bloomberg. Futures for the same month were 0.7 percent higher at 1,543 pounds ($2,355) a ton on NYSE Liffe in London.

Cocoa gained 1.9 percent in London yesterday and 2.2 percent in New York.

Grindings in Europe dropped to 339,377 tons in the first quarter from 353,311 tons a year earlier, industry group ECA said. In Germany, grindings dropped 13 percent to 97,998.9 tons, according to the Bonn-based Association of the German Confectionery Industry.

‘Better’ Performance

Several factors may mean that the decline in the European grind was closer to 1 percent, “a far better performance than anticipated by a large number of those in the business,” Jonathan Parkman, co-head of agriculture at London-based Marex Spectron, said today in an e-mailed note.

West African producers are starting to harvest the smaller of two annual crops and the harvest in Indonesia is delayed, Citigroup’s Smith said. Slow cocoa purchases from Ghana, the world’s second-biggest grower after Ivory Coast, also added to the price rally yesterday, he said.

Raw sugar for July delivery slid 0.4 percent to 17.80 cents a pound in New York. White sugar for August delivery was little changed at $505.50 a ton in London.

The premium raw sugar for May delivery commands over the July futures fell to 0.11 cent a pound from a high of 0.27 cent a pound two days ago as the weather turned dry in Brazil, potentially helping the harvest advance. The main growing region of center south will be mostly dry this week, MDA Information Systems LLC said in a report yesterday.

Arabica-coffee futures for delivery in July rose 0.7 percent to $1.382 a pound on ICE. Robusta-coffee futures for delivery in July rose 0.3 percent to $2,078 a ton on NYSE Liffe.

To contact the reporter on this story: Isis Almeida in London at ialmeida3@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net

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