Cocoa Climbs to Highest Since 1989 on Dollar, Supply Concerns

By Marianne Stigset

Dec. 11 (Bloomberg) -- Cocoa rose to its highest since at least 1989 in London as a weaker dollar buoyed demand for commodities and amid concern about supply from Ivory Coast, the world’s biggest grower.

Deliveries to Ivory Coast ports for shipment abroad fell 30 percent in the week ended Nov. 30 to about 45,315 metric tons from 65,000 tons a year earlier, an industry official with access to the information said yesterday. The country’s growers are getting paid 20 percent more for beans than a month ago because prolonged rainfall has reduced supply, according to figures published by the state-run Bourse du Café et du Cacao.

Cocoa is being “supported once more by dollar weakness and as the story continues, an increasingly bullish fundamental forward outlook,” Stephanie Garner, a cocoa trader at Sucden (U.K.) Ltd., said in a report today.

Cocoa for December delivery rose 15 pounds, or 0.8 percent, to 1,840 pounds ($2,745) a ton on London’s Liffe exchange, the highest since at least 1989. Cocoa gained 22 percent last month, the biggest jump since November 2001, and has climbed 76 percent this year. Cocoa futures for March delivery fell $18, or 0.3 percent, to $2,374 a metric ton on ICE Futures U.S. in New York.

Cocoa growers in Ivory Coast are being paid an average of 600 CFA francs ($1.21) a kilogram (2.2 pounds), an increase of 20 percent on last month, according to Bourse du Café et du Cacao.

“The price is going up to at least 600 CFA francs because we are all struggling to get cocoa beans,” Mamadou Bamba, a buyer for the exporting cooperative Kavokiva, said by phone from the central town of Daloa yesterday. “It’s a question of demand and supply, and the competition is fierce.”

Black Pod

Black pod, a fungus that causes cocoa pods to rot, and adverse weather have affected plantations in Ivory Coast, according to Saibou Toure, a buying agent for the exporting cooperative CCPA.

Cocoa production will outpace demand by 21,000 tons in the 2008-09 season, less than half of what was expected a month earlier, Fortis said last month.

Among other agricultural commodities, robusta coffee for January delivery fell $57, or 3 percent, to $1,830 a ton. White sugar for March delivery climbed $1.20, or 0.4 percent, to $319.90 a ton.

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