Cocoa Heads for Second Weekly Gain on Ivorian Supply Concern

By Marianne Stigset

Nov. 21 (Bloomberg) -- Cocoa headed for its second consecutive weekly gain in London on concern that supply from Ivory Coast, the world's biggest grower, will decline.

A ban on the export of poor quality beans has already hurt the country's coffee trade. Exports fell 93 percent in October to 1,020 metric tons compared with a year earlier, the west African nation's ports of Abidjan and San Pedro said yesterday. Ivory Coast's cocoa crop may ``barely reach'' 1 million tons this season as disease and rainfall crimp output, according to Ali Lakiss, director of cocoa exporter Saf-Cacao.

``There is hardly any cocoa,'' Lakiss said by phone from the western port of San Pedro yesterday. ``So far this season, I've bought 8,000 tons while last year I already had about 30,000 tons.''

Cocoa for December delivery rose 13 pounds, or 0.9 percent, to 1,483 pounds ($2,230) a metric ton as of 11:10 a.m. on the Liffe exchange in London. Cocoa has gained 8.6 percent this week, extending this year's advance to 42 percent.

Cocoa futures for March delivery climbed $41, or 2 percent, to $2,050 a metric ton on ICE Futures U.S. in New York. Cocoa traded in New York has been the best performer in the UBS Bloomberg CMCI Index of 26 commodities this year.

The Ivorian state-run Coffee and Cocoa Management Committee on Oct. 5 said that poor quality coffee and cocoa beans wouldn't be exported.

Shipments from Abidjan dropped to 911 tons in October from 11,247 tons a year earlier, while exports from San Pedro declined to 109 tons from 3,177 tons.

Drier Weather

Black pod, a fungus that causes cocoa pods to turn black and rot, and adverse weather is affecting plantations, according to Lakiss.

``Drier weather through the major cocoa areas of Ghana and Ivory Coast, west Africa, favor late developing cocoa and any early harvesting,'' forecaster Meteorlogix LLC said yesterday. ``Although some areas of the south may be wet due to periodic isolated thunderstorm activity.''

Global production will outpace demand by 52,000 tons in the 2008-09 season, according to Fortis.

Cocoa stockpiles rose for the first time since September while robusta coffee inventories dropped for a third consecutive period, Liffe exchange data show.

Warehouses monitored by the exchange held 156,990 tons of cocoa on Nov. 17, up from 134,860 tons two weeks ago, the exchange said on its Web site.

Robusta stockpiles totaled 32,641 lots, each equal to 5 metric tons, as of Nov. 17, compared with 34,179 lots two weeks earlier.

Robusta coffee for January delivery rose $7, or 0.4 percent, to $1,826 a ton in London.

White sugar for March delivery fell $1, or 0.3 percent, to $321.50 a ton.

To contact the reporter on this story: Marianne Stigset in Oslo at mstigset@bloomberg.net