Data showing increased cocoa consumption by European food companies like Nestle pushed the price of futures up sharply in Thursday trading. On the ICE in New York, cocoa futures for September delivery rose $108 to $3,153 per ton.
Advances on the Liffe exchange in London were more subdued, with the September contract gaining 1.6 percent to $3,717 per ton.
“Funds are probably behind the move and squeezing physical buyers,” Eugen Weinberg of Commerzbank AG in Frankfurt told Bloomberg News.
In a letter to the NYSE Liffe, a group of 16 European cocoa companies accused unnamed large players of manipulating the price of cocoa futures, “bringing the London market into disrepute,” reported the Financial Times.
It remains unclear how much of the price movement is down to a genuine increase in demand, but on Wednesday, the European Cocoa Association reported that the second quarter of fiscal year 2010 saw a 12.7 percent rise in cocoa processing.
A number of the groups complaining to the Liffe are end-users, usually cocoa processors who use the futures contracts to hedge against their exposure to the market.
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