Cocoa Falls, Caps Longest Slump in 50 Years, on Supply Outlook
Posted by Labels: Futures Cocoa and CoffeeBy Isis Almeida and Marvin G. Perez
(Bloomberg) -- Cocoa fell, capping the longest slump in 50 years, on speculation that supplies from West Africa, the world’s biggest producing region, will exceed initial estimates.
Cocoa for March delivery dropped 0.5 percent to settle at $2,131 a metric ton at 12:02 pm. on ICE Futures U.S. in New York. The price dropped for the 11th straight session, the longest slump since at least 1961, according to Bloomberg data. Earlier, the commodity touched $2,078, the lowest for a most- active contract since November 2008.
Output in Ivory Coast, the world’s top producer, may be 1.43 million tons in the year ending Sept. 30, up 3.2 percent from its prior forecast, Ecobank Transnational Inc., based in Lome, Togo, said. Global supplies will exceed demand for the second straight year, Marex Spectron Group Ltd, a London-based broker, has said.
“In addition to external factors such as the euro-zone debt crisis and associated concerns about demand, the current supply surplus is also weighing on prices,” Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt, said in a report. “Supply estimates for the current crop year are likewise being revised upward.”
Cocoa has dropped 44 percent from a 32-year high of $3,775 a ton on March 11. In 2011, the price has slumped 30 percent, and only cotton has posted a bigger drop among 24 raw materials in the Standard & Poor’s GSCI index.
The commodity “is falling on ample supplies and economic contraction,” in Europe, Fain Shaffer, the president of Infinity Trading Corp. in Medford, Oregon, said in an e-mail. “The next objective may be $1,761, which is the 200-day moving average on a monthly chart.”
In London, cocoa futures for March delivery dropped 1 percent to 1,369 pounds ($2,139) a ton on NYSE Liffe. The price has dropped 32 percent this year.
--Editors: Patrick McKiernan, Millie Munshi
To contact the reporter on this story: Isis Almeida in London at ialmeida3@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.ne
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