Cocoa Prices Fall on Demand Concerns
20 January 2017 - 9:04PM
Dow Jones News
By Carolyn Cui
Cocoa futures fell Friday, testing fresh four-year lows,
following an industry report showing lower-than-expected demand in
North America during the fourth quarter.
Cocoa for March delivery dropped 1.1% to settle at $2,140 a ton
on the ICE Futures U.S. exchange, closing in on a four-year low of
$2,126 hit at the end of last year.
Cocoa processors in the U.S., Canada and Mexico reported a 1.1%
drop in cocoa beans processed during the fourth quarter of 2016
year over year, the worst fourth-quarter tonnage since 2011,
according to the National Confectioners Association.
The 117,588 tons of cocoa beans processed by North American
factories in the fourth quarter was also the smallest tonnage in
any quarter since the second quarter of 2012 and follows similarly
disappointing data released this week out of Europe. Analysts had
been expecting better figures as a result of recently improved
margins for processors.
The quarterly data of cocoa beans processed into cocoa powder
and other products are considered a barometer for chocolate
demand.
Following a bull run for most of 2016, cocoa prices dropped
sharply in the fourth quarter and have suffered further losses so
far this year, making the cocoa market a solidly short bet for the
first time in 4-1/2 years.
Analysts are anticipating a surplus of cocoa this year as
weather in West Africa, home to the most production, has been
favorable for the development and now harvest of the larger main
crop.
In other markets, raw sugar for March unchanged at 20.18 cents a
pound, arabica coffee rose 1.6% to $1.5320 a pound in the March
contract, frozen concentrated orange-juice futures for March fell
0.9% to settle at $1.6625 a pound and March cotton gained 0.5% to
close at 73.04 cents a pound.
Write to Carolyn Cui at carolyn.cui@wsj.com
(END) Dow Jones Newswires
January 20, 2017 15:49 ET (20:49 GMT)
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