Stronger growing circumstances in regions of West Africa, the globe’s largest growing area, have pulled down the value of the soft commodity 2.6 percent thus far this month. Regions of the Ivory Coast and Ghana, the top and second-largest producers of the soft commodity, have seen sufficient rainfall.
“The industry is holding a reasonable amount of forward cover,” states a report penned by agriculture options brokerage head Eric Sivry with Marex in London. “Lower prices may have negative implications for the production in the forthcoming seasons. As such, they may have a greater inclination than in the past to buy cocoa at current levels and extend cover in the process.”
At 1:33 p.m. on Wednesday, cocoa futures rose 0.18 percent, a $4 gain to $2,174 per metric ton.
The Wall Street Journal reports the Cocoa Association of Asia noted grindings of the soft commodity rose 2.8 percent during the final quarter of last year.
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