Business
Fluctuation In Cocoa Price Worries Stakeholders
In November, the ICCO daily price averaged $3,384 per tone, up by US $11.00 compared to the average price recorded in the previous month (US$3,373), and ranged between US$3,269 and US$3,430.
After reaching a peak in the fourth week of October cocoa future price move sideways with a downward trend, falling to 2,277 pounds per tone in London and to US$3,301 per tone in New York in the middle of the first week of November.
Indeed, as price had reached new record height in the fourth week of October, at that point market participants were uncertain about the potentials for and further rise and, at such relatively high prices, the markets become vulnerable to profit-earning.
Finally, price tumble from the middle of the first week of November to level five per cent lower in London, to 2,054 pounds and in the middle of the month six per cent lower in New York, to US$3,114. The bearish factories include the continuous report of large weekly cocoa arrivals in Cote d’Ivoire by new agencies, confirming a serious start of the main crop in his major cocoa producing counties. According to reports from exporters, cumulative cocoa arrivals reached around 378,000 tones at the end of the month, which was 56 per cent above the level recorded at the same period in he previous year.
The return of rainfall in the West African costal belt in November, which brought hopes of a limitation to the detrimental effects of the lack of in recorded in the previous months on the second half of the main harvest (January – March 2009 and the coming mid crop. Indeed, the August – October period (just before the start of the dry season, in winter) is estimated to have recorded less than half of the normal volume of rain fall in the cocoa area of Cote d’Ivoire.
Increased concerns that demand for cocoa beans might not recover in the fourth quarter of 2009, as expected earlier, leading the European cocoa butter to cocoa beans being used as a proxy for processing margins to decline further, to below 2.0 the markets subsequently found some fresh impetus.
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