CSCE cocoa futures closed lower on Thursday after a tepid speculative bounce failed to best the market's recent high, dealers said.
"The cocoa market went down reluctantly today. Outright volume was light. I think a lot of people were caught off-guard with the spike up on Wednesday and no one wanted to keep the rally going," said one commission house broker.
Benchmark March cocoa settled down $31 at $1,611 a tonne after trading $1,602 to $1,650.
The contract surged to a 3-week high on Wednesday, soaring $92 as traders here followed an 11 percent rise in the London cocoa market on bullish German grind data.
"March opened weak and speculators traded March up to Wednesday's high at $1,650 but offers there stalled the market and we dribbled away," said another broker.
May cocoa lost $29 to close at $1,620 a tonne and the back months settled $27 or $28 lower. Estimated volume slowed sharply to 5,045 lots on Thursday from 10,534 lots on Wednesday.
Traders said the outright volume on Wednesday was even slower if you net out 701 switches and approximately 1,075 Against Actuals (AAs).
The market continues to be on edge for trouble in the Ivory Coast as it might cause shipment problems or crop losses in the world's biggest cocoa producer.
Armed men set fire to a village and shot dead a man in the latest outbreak of ethnic clashes in the cocoa-rich western Ivory Coast, a witness said on Thursday.
The witness and a local official said the attack took place on Wednesday on the village of Kahin, in a region where a civil war officially declared over in July has inflamed decades-old ethnic tensions frequently rooted in land disputes.
War broke out after a failed coup attempt in September 2002, and killed thousands.
After the close, Ivory Coast's ambassador to the UN said his country's cocoa production would be down 20 percent from a year ago.
Ambassador Philippe Djangone-Bi in a press briefing forecast production for the 2003/04 harvest of 960,000 tonnes, down from 1.2 million tonnes for the 2002/03 harvest.
CSCE certified warehouse stocks fell to 1,500,570 60-kg bags on January 8 from 1,504,609 on January 7.
CSCE is a subsidiary of the New York Board of Trade.
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