London's cocoa market shot to the highest price in almost four months on Friday on speculation about political instability in top grower Ivory Coast, traders said. Liffe's benchmark May futures ended at 961 pounds a tonne, the highest close since 987 on November 15. It hit an intra-day peak of 979 pounds a tonne and its session low was 942. A senior aide to Ivory Coast's president denied on Friday rebel claims that the government was planning an imminent attack but tension rose as both the army and the rebels put their troops on high alert.
Turnover on London cocoa reached a respectable 21,566 lots with May shifting 9,778 lots.
"There is a feeling that something is going on and (market players) may be taking cover before the weekend on the back of that," a London-based analyst said.
Cocoa has recaptured the attention of funds after violent skirmishes between pro-government militia and rebels holding the north of the country last week.
Some dealers said the net long position held by speculators in New York cocoa may now be at a record 50,000 lots.
Ivory Coast has been divided since 2002, when a civil war pushed London's benchmark cocoa prices to a 17-year high of 1,636 pounds.
They are now approaching the 1,032 level seen in mid-November when a breakdown in the country's cease-fire triggered a wave of anti-Western aggression and disrupted cocoa exports.
Analysts have said that there is plenty of scope for a fund-driven rally because the West African main crop is over, reducing pressure from the sell-side.
Expectations of a global cocoa deficit for the 2004/05 season after a surplus the previous year are also likely to help fuel speculation in the market.
German industry generally withdrew from the cocoa market this week because of the higher world prices, traders said on Friday.
SUGAR CLOSES HIGHER: London sugar futures posted strong gains on Friday, buoyed by trade buying, and traders noted increased cash sugar enquiries. A stronger New York market lent support, they added.
Liffe May sugar settled up $5.40 or two percent at $266.80 a tonne in volume of 4,054 lots, having moved between $267.00 and $261.00.
August concluded up $4.70 at $254.70 in volume of 970 lots, after trading between $265.30 and $260.60.
"There is good trade-type buying around," one trader said, noting that physical business had picked up, notably enquiries from Indian, Pakistani and Russian buyers. Another trader referred to turnover of AAs (a form of hedging).
Comments
Comments are closed.