Futures Market News
Cocoa futures projected to drop due to rain
Mar 15, 2012 10:48 AM
Heavy rains in West Africa's dry cocoa plantations are prompting analysts to reduce their projections for shortages of the soft commodity, according to Bloomberg.
The region provides the world with roughly 69 percent of its cocoa beans as Ivory Coast and Ghana are the world's top two cocoa-producing nations. The nourishment for the plantations is projected to halt the soft commodity's biggest rally in a year. Prior to Thursday, cocoa futures had gained 6.8 percent on ICE Futures U.S.
"Recent rains in West Africa have been plentiful, particularly in Ghana, and this is positive for the development of the mid-crop and the new crop," Eric Sivry, head of Marex Spectron's agriculture options brokerage, told Bloomberg. "Many analysts have been caught by surprise."
At 10:18 a.m. on Thursday, cocoa futures fell 4.97 percent, a $115 loss to $2,199 per metric ton.
Cameroon, the globe's fifth-largest supplier of cocoa, is projected to produce 20 percent less cocoa this year due to infestations of insects and black pod fungal disease, according to the International Cocoa Association.
Reuters reports the soft commodity was seeing light business early in the trading session on Thursday.
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