Cocoa futures plunged to their lowest value in one month on Monday as investors and traders were training their focus on the globe's top grower of the soft commodity as the season is poised to begin, according to Reuters.
Sector reforms are underway in Ivory Coast as the October 1 kickoff to the 2012-2013 season is one week away. The West African nation is set to eliminate a tax break that has been granted for 20 years. The change represents a boon for exporters who are not local grinders of cocoa.
"I think this is bearish for differentials. If you lined it up with the news that stocks are being sold back into the market from the pressers, both stories look as if they ought to impact (weaken) the structure of the market," joint agriculture head Jonathan Parkman with broker Marex Spectron told the news source.
At 2 p.m. on Monday, cocoa futures fell 2.98 percent, a $75 loss to $2,446 per metric ton.
Bloomberg reports the second-largest grower of cocoa, Ghana, is minimizing prospects for this season due to a lack of rain damaging pods.
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