Speculative buying fuelled a London cocoa market rally that took prices almost five percent up on Tuesday amid uncertainty about the size of the 2003/04 crop in world top producer Ivory Coast, dealers said.
News of six people killed in ethnic violence in the West African country and a strong New York market leading the way contributed to extend gains sparked by the release of weak Ivorian arrival figures.
"We knew the arrivals were low but with the figures seen today we got a confirmation of that. And then we heard about the clashes, which really sparked the bull move and ate away all the origin selling it found on the way," a trader said.
French military officials said on Tuesday that six people had been killed in the latest outbreak of ethnic violence in cocoa-rich western Ivory Coast.
Benchmark March closed 34 pounds higher, or four percent, at 885 a tonne on 4,058 lots out of a total turnover of 8,249 lots. It moved between 845 and 892, which was a 4.8 percent rise and recovered some of the losses registered in the last days of 2003.