Cocoa Set for Bumpy Ride as Africa Premium Disrupts Futures
- Top cocoa growers imposed a premium of $400 a ton over futures
- Hefty price tag could disconnect futures and physical markets
Photographer: Jose Cendon/Bloomberg
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Cocoa traders are bracing for wild swings as a premium imposed by the world’s largest producers is likely to generate a disconnect between futures and physical markets.
Ivory Coast and Ghana are charging $400 per metric ton above the futures price for cocoa for shipment from October, making traders less likely to deliver beans from the top growers when futures contracts expire in London, the hub for West African hedging.