Cocoa Advances to a 20-Year High in London as Demand Rebounds
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By M. Shankar
Dec. 9 (Bloomberg) -- Cocoa climbed to the highest price in at least two decades in London as some investors sought to diversify their assets by buying commodities.
Cocoa for December delivery rose to 2,204 pounds ($3,572) a metric ton on the Liffe exchange, the highest closing price since at least 1989.
“Money is coming back into defensive commodities such as cocoa and coffee,” said William Adjadj, a trader with Sucden Financial Ltd. in Paris. Standard & Poor’s cut its outlook for Spain’s debt rating, a day after Fitch Ratings lowered its rating for Greece.
While production from Ivory Coast, the world’s biggest cocoa grower, is expected to improve, the West African country’s total output in the 2008-09 season fell by 160,000 tons to 1.22 million tons, according to the International Cocoa Organization.
The pound fell against the dollar and the euro, making the beans cheaper for investors holding those currencies.
Among other agricultural commodities traded on Liffe, robusta coffee for January delivery jumped $18, or 1.3 percent, to $1,373 a ton. Coffee has gained 4 percent this week.
Production from Vietnam National Coffee Corp., the country’s biggest exporter, will drop because the company plans to replant trees, Nguyen Cong Hoang, deputy director general, said today. Vietnam is the biggest grower of robusta beans.
Global coffee output will likely decline to 123 million to 125 million bags in 2009-10 from 128 million bags in the previous season, the International Coffee Organization said in a report today. Demand may expand to 132 million bags this year, compared with 130 million last year, it said.
White, or refined, sugar for March delivery fell $10.10, or 1.7 percent, to $599.80 a ton, the fifth consecutive decline.
To contact the reporter on this story: M. Shankar in London at mshankar@bloomberg.net.
