Cocoa traders and chocolate makers have cut their net short position nearly in half in the past seven weeks, bringing it to the lowest since July 2013, data showed on Friday, suggesting they are unwinding hedges. This move comes as the benchmark cocoa futures market has fallen 16 percent from a 3-1/2-year high reached in September, when buying was spurred by concern that the deadly Ebola virus could spread to the world's top producer Ivory Coast and potentially hinder movement of supplies.
"The attitudes of market participants still are heavily bullish," said one industry source. On Friday, data from the US Commodity Futures Trading Commission showed the commercial net short position dropped 4,557 contracts to 54,817 contracts in the week to November 18. This is down 45 percent from seven weeks prior, suggesting some of the market participants expect prices to return higher.