Increased investment by Ivory Coast cocoa farmers in farms is likely to ensue as a consequence of inclement weather during the past harvest, farmers' groups told Bloomberg.
Growers of the soft commodity in the globe's top producer of the soft commodity are set to earn 8.7 percent more for cocoa beans this year. The West African nation last year adapted the cocoa industry with plans that include selling the majority of beans prior to an actual harvest.
"The higher price and the fact it is guaranteed may encourage farmers to invest more in their farms," group of cocoa-farmer cooperatives group chief Moussa Zoungrana told the news service on Thursday. "They may decide to extend their farms, plant new variety of seeds or better treat their plantations with fertilizers and pesticides."
At 9:46 a.m. on Friday, cocoa futures gained 0.67 percent, a $16 lift to $2,411 per metric ton.
But demand for the soft commodity from Europe fell during the second quarter as a result of the sovereign debt crisis, Reuters reports. Third quarter demand is slated to drop as much as 20 percent.
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.