Cocoa Swings Lower in Volatile Market Hit by Thin Trading
- Futures fluctuate, but in a smaller range than on Tuesday
- Crunch has led to lack of liquidity, fueling big price moves
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Cocoa prices turned lower on Wednesday, continuing a week of choppy trading that has seen a lack of liquidity fuel more extreme moves.
Futures in New York sank as much as 11%, reversing earlier gains in the day. A historic supply crunch driven by poor harvests in West Africa has caused the most-active contract to surge this year to an all-time high near $12,000 a ton last month. The rally has made it more expensive to maintain positions and prompted traders to pull out of the market, curbing liquidity and leaving cocoa vulnerable to huge price moves.