ICCO Forecasts Supply, Cocoa Falls for First Day in Five

ICCO Forecasts Supply, Cocoa Falls for First Day in Five : Jan. 13 (Bloomberg) -- Cocoa fell for the first day in five in New York and London after the International Cocoa Organization predicted higher supplies of the beans. Global production will climb between 6 percent and 8 percent in the season that began Oct. 1, ICCO statistician Laurent Pipitone said yesterday. Prices for the chocolate ingredient last month reached the highest level since August in New York trading.

"Cocoa is probably closer to the high end of the range," said Eric Sivry, joint head of agricultural-options brokerage Marex Financial Ltd. in London.

Cocoa for March delivery dropped $13, or 0.4 percent, to $2,946 a metric ton at 8:05 a.m. on ICE Futures U.S. in New York. The beans touched $3,140 on Dec. 7. March-delivery cocoa fell 17 pounds, or 0.9 percent, to 1,963 pounds ($3,098) a ton on NYSE Liffe in London.

"The next 50 to 70 pounds may see quite a lot of origin- related and spec selling," Sivry said. "Unless there is more substantial news on military intervention in Ivory Coast, the market may remain stuck in a range."

Tensions have escalated in Ivory Coast, the world's largest cocoa producer, as incumbent President Laurent Gbagbo refuses to step down in favor of Alassane Ouattara. The national electoral commission, the United Nations and the U.S. recognize Ouattara as the winner of an election in November. Senegal this week renewed calls for military intervention to end the stalemate.

Cocoa Shipments

Ivory Coast sent 685,000 tons of cocoa to ports from Oct. 1 to Jan. 9, according to the ICCO. That compares with 702,000 tons a year earlier, Pipitone said. This year's figure "quite likely" is understated, he said by phone yesterday.

"Because of the unstable political situation, reporting of data has not been so reliable," Pipitone said.

Refined, or white, sugar for March delivery added $4.50, or 0.6 percent, to $785.50 a ton on NYSE Liffe, rebounding from yesterday's 3.3 percent slump.

"It was a fast correction yesterday, and it shows how vulnerable the market is," said Fabienne Pointier, an analyst at Lausanne, Switzerland-based researcher Kingsman SA. "We were already seeing more interest yesterday at the end of the afternoon from end-destination buyers and also this morning, concretizing their purchase, at least for white sugar."

Raw sugar for March delivery slid 0.29 cent, or 0.9 percent, to 31.73 cents a pound in New York.

Fundamentals remain positive on a longer horizon and sugar is set to gain, according to Pointier. Frost has damaged cane in China as rains in Australia affect crop development. A smaller harvest in Brazil, the world's biggest sugar producer, may drive prices up in this year's first half, broker C. Czarnikow Sugar Futures Ltd. said last month.

Robusta coffee for March delivery lost 0.3 percent to $2,160 a ton in London. Arabica beans for March delivery slipped 0.3 percent to $2.399 a pound in New York after reaching the highest level since June 1997 yesterday. Cotton for March delivery climbed 0.8 percent to $1.4909 a pound in New York, gaining for a fourth day. For the latest updates PRESS CTR + D or visit Stock Market news Today

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