US cocoa futures contracts settled higher on Tuesday on speculative buying unmatched by light origin selling while continued dry weather in West Africa underpinned the market, traders said.
"There's talk right now that we could see revision lower for the Ghana and the Ivory Coast crop. But in terms of solid news that has come out officially: nothing," one trader said.
The New York Board of Trade benchmark March cocoa gained $14 to $1,616 per tonne, in dealings from $1,597 to $1,620. May rose $16 at $1,650, after trading in a range from $1,631 to $1,653. The rest closed $16 to $17 higher.
Volume near the close was estimated by NYBoT at 8,145 lots, down from the 11,907 officially tallied on Monday. Open interest rose 481 lots to 142,473 lots as of January 29.
Cocoa futures in London closed up with spreads dominating trade while growing concerns over dry weather in West Africa underpinned the session, dealers said. Liffe's March cocoa futures contract settled up 10 pounds to 889 pounds per tonne, in dealings from 876 to 890 pounds. May climbed the same to 906 pounds, in a trading band from 893 to 908.
Meanwhile, light rainfall in two of Ghana's heavy-yielding cocoa regions and the easing of the seasonal harmattan wind have reduced fears of a fall in output after a mostly dry January, buyers in the world's no. 2 grower said. The harmattan, a cool wind sweeping down from the Sahara, started in late December and can last to the end of March. Buyers feared a prolonged harmattan could hurt output as it shrivels cherelles, the small flowers from which pods grow.
Cocoa arrivals at Ivory Coast's port of San Pedro reached 322,360 tonnes January 21, 2007, according to data from the Coffee and Cocoa Bourse (BCC) obtained by Reuters on Tuesday. That compared with 315,648 tonnes delivered to the port during the same period of the 2005/06 season, the data showed. Thousands of immigrant cocoa growers chased from the far south-west of Ivory Coast, the world's largest cocoa producer, after a dispute with locals have begun returning to their abandoned farms after making peace, a government minister told Reuters on Tuesday.
In 1999 locals chased out a group of Kroumene people who came from another part of Ivory Coast as well as immigrants from northern neighbour Burkina Faso, accusing them of killing a member of their community.