Cocoa Rises in London as U.S. Inventories Fall to 6-Month Low

By M. Shankar

Sept. 9 (Bloomberg) -- Cocoa rose for a second session in London as falling stockpiles signaled reduced supplies of the beans used to make chocolate.

Inventories in U.S. warehouses monitored by ICE Futures U.S. fell 0.6 percent yesterday to 2.78 million bags, the lowest since Feb. 12. Cocoa has climbed 24 percent in the past year as world output is estimated to fall 73,000 metric tons short of demand in the harvest year ending September 2009, the London- based International Cocoa Organization said Aug. 25.

Falling inventories “are certainly providing a floor if not some upside to this market,” London-based Sucden Financial Ltd. trader Stephanie Garner wrote in a report today.

Cocoa for December delivery advanced 15 pounds, or 0.8 percent, to 1,900 pounds ($3,135) a ton on the Liffe exchange at 12:20 p.m. local time. It earlier rose to 1,912 pounds, the highest since Sept. 3. December cocoa futures gained 0.8 percent to $2,975 a ton on ICE Futures.

Ghana, the world’s largest producer after the Ivory Coast, will miss its target of producing 1 million tons a year by the 2010-11 season, according to Tony Fofie, chief executive officer of the Ghana Cocoa Board.

The state-run industry overseer expects the West African country to meet the goal by the 2012-13 season, Fofie said in a Sept. 7 interview at the Cocoa Producers Alliance conference in Lome, Togo.

Among other agricultural commodities traded on Liffe, white, or refined, sugar for December delivery fell 0.7 percent to $542.90 a ton.

Adequate Sugar

India, the world’s biggest sugar consumer, has enough supplies to meet rising demand for the sweetener during the nation’s festival season over the next two months, according to the Indian Sugar Mills Association.

The “current year’s demand has been met by opening stock, production and imports,” President Samir Somaiya said in a phone interview from Mumbai today, echoing assurances about supply from the government.

Robusta coffee for November delivery climbed 0.4 percent to $1,500 a ton. Coffee output in Brazil, the world’s biggest producer, next year will be close to the record 48.5 million bags produced in the 2002-03 season, said Airton Camargo, the head of agribusiness data at the Agriculture Ministry.

To contact the reporter on this story: M. Shankar in London at mshankar@bloomberg.net