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Cocoa Jumps to 11-Month High on Mounting Supply Concerns

Sept. 5 (Bloomberg) -- Cocoa futures jumped to the highest in almost a year on mounting West African supply concerns. Cotton and orange juice dropped, while sugar advanced and coffee was unchanged.

Ivory Coast, the world’s top cocoa exporter, and Ghana, the second-biggest, had as much as 1.5 inches (3.8 centimeters) of rain in the past 30 days, compared with at least 3 inches typically, Kyle Tapley, a meteorologist at MDA Weather Services in Gaithersburg, Maryland, said yesterday in a telephone interview. Inventories at warehouses monitored by ICE Futures U.S. have dropped 7.7 percent this quarter to the lowest since April 2.

“We won’t know the crop losses until the harvest” starts next month in West Africa, Sterling Smith, a futures specialist at Citigroup Inc. in Chicago, said in a telephone interview. “The drop in stockpiles is supportive for prices because it shows healthy demand in the cash market.”

Cocoa futures for December delivery advanced 2.8 percent to settle at $2,567 a metric ton at 12:15 p.m. on ICE in New York. Earlier, the price reached $2,575, the highest for a most-active contract since Sept. 28, 2012. Prices have gained 15 percent this year, trailing only crude oil’s 18 percent advance among 24 raw materials in the Standard & Poor’s GSCI Spot Index.

Some growing areas in West Africa may get as much as 1.5 inches of rain by Sept. 9, MDA’s Tapley said yesterday.

Cotton futures for December delivery fell 0.5 percent to 82.3 cents a pound, after touching 82.11 cents, the lowest since June 4. Orange-juice futures for November delivery slid 0.4 percent to $1.327 a pound.

Sugar Prices

Raw-sugar futures for October delivery gained 0.8 percent to 16.51 cents a pound.

The global sugar surplus in the 2013-2014 season will be 2 million tons, 49 percent smaller than previously forecast as lower prices mean growers cut back and consumers buy more, according to Czarnikow Group Ltd., which supplies clients in 83 countries.

Arabica-coffee futures for December delivery closed unchanged at $1.1685 a pound. Earlier, the price touched $1.1525, the lowest since July 16, 2009. The commodity dropped 19 percent this year, partly because of bumper crops in Brazil, the top exporter.

To contact the reporters on this story: Luzi Ann Javier in Singapore at ljavier@bloomberg.net; Marvin G. Perez in New York at mperez71@bloomberg.net

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net

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