Cocoa Prices Decline to Lowest Since January on Waning Demand

By Ron Day

Oct. 16 (Bloomberg) -- Cocoa prices fell to the lowest in nine months on speculation that demand is drying up as the global economy slows.

Energy, metal and agricultural prices have declined as falling equities, tighter lending conditions and sliding retail sales signaled a drop in commodity consumption. Global cocoa output will exceed demand in the year ending Sept. 30, Brussels- based Fortis Bank said last month.

``The overall tone in the market continues to be bearish,'' Stephanie Garner, a cocoa trader at Sucden (U.K.) Ltd. in London, said in a report.

Cocoa futures for December delivery dropped $74, or 3.4 percent, to $2,127 a metric ton at 8:43 a.m. on ICE Futures U.S. in New York. Earlier, the price touched $2,093, the lowest for a most-active contract since Jan. 22. Before today, cocoa dropped 14 percent this month.

Today, the Reuters/Jefferies CRB Index of 19 raw materials extended a decline to the lowest since February 2005.

To contact the reporter on this story: Ron Day in New York at rday1@bloomberg.net.