Cocoa Posts Longest Winning Streak in Nine Months on Deliveries

By Marianne Stigset

Nov. 19 (Bloomberg) -- Cocoa rose in London, recording the longest winning streak in nine months, after reports deliveries have declined in Ivory Coast, the world's biggest grower.

Cocoa prices are up 41 percent this year, even after falling for the past two months, compared with a 29 percent slump in the UBS Bloomberg CMCI Index of 26 commodities. Arrivals of the beans at ports in Ivory Coast fell 54 percent between Oct. 1 and Nov. 16, Reuters reported this week, citing unidentified exporters.

``Soft and tropical commodities such as cocoa and grains will be the first to get out of the downward trend,'' said Eugen Weinberg, a Commerzbank AG analyst in Frankfurt. ``People will still be eating chocolate and grains even in a recession.''

Cocoa for December delivery rose 1 pound, or 0.1 percent, to 1,469 pounds ($2,212) a metric ton by 11:20 a.m. on the Liffe exchange in London, the ninth straight day of gains. Futures for March delivery rose $14, or 0.7 percent, to $2,060 a ton on ICE Futures U.S. in New York.

``There seems to still be an element of caution with regards to the problems in Ivory Coast,'' Ryan Bennett, a cocoa trader at Sucden (U.K.) Ltd. wrote in a report today.

Hedge-fund managers and other large speculators increased net-long positions in New York cocoa futures in the week ended Nov. 11, according to U.S. Commodity Futures Trading Commission data. Speculative long positions, or bets prices will rise, outnumbered short positions by 5,854 contracts on ICE Futures U.S., formerly known as the New York Board of Trade.

Chocolate Demand

Chocolate demand has held up in previous slowdowns, Patrick de Maeseneire, chief executive officer at Barry Callebaut AG, the world's largest bulk-chocolate maker, said earlier this month.

Steady demand for candy helped Cadbury Plc, the U.K. maker of Green & Black's organic chocolate bars, to maintain its annual sales and profitability goals last month.

Global cocoa production will outpace demand by 52,000 tons in the 2008-09 season, according to Fortis. The bank on Oct. 31 reduced its estimate for grindings in the period to 3.71 million

Among other agricultural commodities, white sugar for March delivery fell 90 cents, or 0.3 percent, to $324.30 a ton. Robusta coffee for January delivery fell $9 to $1,810 a ton.

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