Cocoa Rallies to 23-Month High on Shortage Outlook; Sugar GainsIsis Almeida and Marvin G. Perez
Cocoa futures reached a 23-month high as ample rains threaten to slow already shrinking supplies from West Africa, the world’s biggest growing region. Sugar, coffee and orange juice also advanced, while cotton slid.
In the year started Oct. 1, cocoa output will trail demand by 173,000 metric tons, followed by a shortage of 113,000 tons the next season, Macquarie Group Ltd. estimates. Growing areas in top producers Ivory Coast and Ghana may get as much as 150 percent of normal rain in October’s second half, slowing the harvest, World Weather Inc. in Overland Park, Kansas, predicts.
“If the heavy rain forecast for Ivory Coast and Ghana does come, it could interrupt deliveries to ports and thus world supplies, at least for a time,” Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt, said in a report e-mailed today.
Cocoa for December delivery advanced 0.7 percent to settle at $2,718 a ton at 12:20 p.m. on ICE Futures U.S. in New York, after reaching $2,731, the highest for a most-active contract since Nov. 8, 2011.
Raw-sugar futures for March delivery rose 0.2 percent to 18.62 cents a pound, after reaching 18.67 cents, the highest since March 18.
Rainfall in Brazil, the world’s top producer, may cut the cane crushed in the first half of this month in the main growing area by as much as 21 percent from a year earlier, said Michael McDougall, a senior vice president at Newedge Group in New York.
“The potential for production losses there” from the wet conditions is supporting the sweetener, Jack Scoville, a vice president for Price Futures Group in Chicago, said in a report.
Arabica-coffee futures for delivery in December gained 0.5 percent to $1.1505 a pound on ICE. Orange-juice futures for November delivery increased 1.1 percent to $1.292 a pound.
Cotton futures for December delivery slipped 0.4 percent to 83.69 cents a pound, the third straight drop.