Cocoa Advances in London on Concern Supply Shortfall Will Widen

By Rachel Graham

Aug. 26 (Bloomberg) -- Cocoa rose for a sixth session in London on concern that a supply shortfall this year will be wider than expected. White sugar advanced to its highest since November 2006.

Cocoa demand will outpace supply by 88,000 metric tons in the year to September, double the previous forecast, the International Cocoa Organization said Aug. 21. That would be a second consecutive annual deficit.

``The reason why cocoa prices have recovered is the ICCO's revision of its deficit,'' Sudakshina Unnikrishnan, a commodities analyst at Barclays Capital, said by phone from London.

Cocoa futures for September delivery rose 51 pounds, or 3.3 percent, to 1,608 pounds ($2,958) a ton as of 2:46 p.m. on the Liffe exchange in London. The contract traded as high as 1,616 pounds, the highest intraday price since Aug. 4.

Cocoa for December gained $7, or 0.2 percent, to $2,875 a metric ton in electronic trading on ICE Futures U.S., the former New York Board of Trade. The contract rose 2 percent yesterday, while Liffe was closed for a public holiday in the U.K.

White, or refined, sugar for October climbed as much as $9.90, or 2.4 percent, to $414.90 a ton on Liffe, the highest compared with intraday prices since Nov. 15, 2006.

Robusta coffee for November rose $9, or 0.4 percent, to $2,307 a ton.

To contact the reporter on this story: Rachel Graham in London at rgraham13@bloomberg.net