Ample supplies from West African harvests and curbed demand strike down cocoa as prices retreat of yearly highs. According to New York Stock Exchange Liffe reports, cocoa stockpiles have increased 19 percent in the past two weeks to 60,210 metric tons. The Ivory Coast, world’s largest producer, is expected to harvest 1.4 million tons which is comparable to the following season.
Sterling Smith, a futures specialist at Citigroup Inc., said that most of the demand will wade as companies have already purchased cocoa needed to make chocolate for the holiday season. Smith said “The cocoa bull market looks to be tiring as seasonal changes in demand are occurring.”
Supply concerns are also a problem for sugar as analysts believe Chinese stockpiles are reaching record levels. Accelerating exportsfrom India are also causing sugar to step back from the yearly high of $20.16 following a fire in a Brazilian sugar warehouse.. Since October 18, raw sugar fall eight percent preceding the plant fire in Brazil.
Deutsche Bank AG reports that another seven percent decline in the second quarter might be likely for sugar futures with an average of $17.25 per pound. Global stockpiles are 1.5 million tons.
Global sugar demand will increase 2.3 percent to a record 167.3 million tons in 2013 to 2014. Production will expand 0.2 percent to 174.9 million tons, the United States Department of Agriculture estimates.
Cocoa closed at $2,651, down .97 percent. Sugar no. 11 futures closed at $18.23, down .49 percent.