Cocoa futures jumped to a 32-year high on mounting political unrest in Ivory Coast, the world’s largest producer.
The only way to resolve the Ivorian presidential-election dispute is to organize protests similar to those that ousted Egypt’s Hosni Mubarak, according to the prime minister appointed by Alassane Ouattara, recognized internationally as the winner of Ivory Coast’s Nov. 28 vote. Units of at least six international banks closed this week amid security concerns.
“Things are starting to rumble up again,” said Drew Geraghty, a commodity broker at ICAP Futures LLC in Jersey City, New Jersey. “People are afraid of the potential for increased unrest.”
Cocoa for May delivery climbed $61, or 1.8 percent, to settle at $3,499 a metric ton at 12:06 p.m. on ICE Futures U.S. in New York. Earlier, the price reached $3,511, the highest for a most-active contract since February 1979. The commodity has gained 25 percent since late November.
The price may rise to $4,000, said Boyd Cruel, a senior analyst at Vision Financial Markets in Chicago. He didn’t give a timeframe. The record high was $5,379 on July 18, 1977.
“We are getting a lot of buying interest,” Cruel said.
Ouattara pledged to extend a one-month ban on cocoa exports should Laurent Gbagbo refuse to step down before Feb. 23, the Financial Times said this week. The bid to cut off funds for Gbagbo was imposed on Jan. 23.
In London, cocoa futures for March delivery advanced 36 pounds, or 1.6 percent, to 2,280 pounds ($3,702) a ton on NYSE Liffe. Source: http://www.bloomberg.com/news/2011-02-18/cocoa-jumps-to-32-year-high-on-turmoil-in-ivory-coast-world-s-top-grower.html
Coffee extended a rally to the highest since 1997 on signs that global demand will outstrip production as investors snapped up shares of U.S. retailers including Starbucks Corp. in a bet that sales will increase.
Green Mountain Coffee Roasters Inc., the largest U.S. seller of single-serve brewers, trades in New York at 295 times cash flow, more than any company in the Standard & Poor’s 500 Index, according to Bloomberg data. Arabica-coffee futures have doubled in the past year as adverse global weather slashed supplies including in Brazil, the world’s biggest producer.
Consumers are drinking more coffee in the past year as demand has rebounded amid the global economic recovery. Inventories monitored by ICE Futures U.S. have plunged to the lowest since April 2000. Green Mountain shares have jumped 47 percent in the 12 months before today, and Starbucks, the world’s largest coffee-shop operator, gained 45 percent. The S&P 500 was up 22 percent in that time.
“Demand is pretty strong,” said Thomas Mikulski, a senior strategist at Lind-Waldock, a broker in Chicago. “There are no fresh developments on new crops, so that has left the market focusing on current tight supplies.”
Arabica-coffee futures for May delivery gained $4.15, or 1.5 percent, to settle at $2.73 a pound at 2 p.m. on ICE in New York. Earlier, the price reached $2.759, the highest since May 1997.
‘Can’t Drink Enough’
“People just can’t seem to drink enough coffee,” said John Carey, a Boston-based money manager at Pioneer Investments, which oversees about $250 billion.
Surging prices will also boost expenses for retailers. Costs “will get progressively worse,” Thomas Cawley, the chief financial officer of Peet’s Coffee & Tea Inc., said this week.
The International Coffee Organization said global supplies probably will stay around 13 million bags, the lowest since the organization began keeping records in the 1960s.
A bag weighs 60 kilograms (132 pounds).
In London, robusta-coffee futures for May delivery advanced $32, or 1.4 percent, to $2,337 a metric ton.
Arabica is grown mainly in Latin America and brewed by specialty companies including Starbucks. Robusta beans, used in instant coffee, are harvested mostly in Asia and parts of Africa.
To contact the reporter on this story: Chris Prentice in New York at cprentice3@bloomberg.net
To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net Source: http://www.bloomberg.com/news/2011-02-18/coffee-futures-climb-to-a-14-year-high-as-surging-demand-boosts-starbucks.html
The dollar fell against the euro for the first week in almost a month as the Federal Reserve signaled its dissatisfaction with job growth, bolstering speculation it will be slow to increase interest rates.
The greenback dropped against most of its major peers as lower-than-forecast retail sales and a rise in jobless claims damped demand. The Swiss franc surged as investors sought safety amid Middle East turmoil, while the pound rose against the dollar and euro on speculation the Bank of England will raise interest rates. The U.S. economy grew faster in the last quarter of 2010 than first estimated, data next week may show.
“The Fed reiterated that they will maintain a high bar for rate raises,” said Aroop Chatterjee, a currency strategist at Barclays Plc in New York. “Diminished expectations for rate hikes have been U.S. dollar negative.”
The dollar fell 1 percent to $1.3693 per euro in New York, the first weekly loss since Jan. 21, from $1.3554 on Feb. 11. Europe’s shared currency rose a second week versus the yen, gaining 0.7 percent to 113.90 and touching 113.92, the strongest level since Jan. 27. The yen had its first five-day advance against the dollar since Jan. 28, gaining 0.3 percent to 83.18.
The euro gained yesterday against most major counterparts after a European Central Bank Executive Board member, Lorenzo Bini Smaghi, said policy makers may need to raise interest rates as global inflation pressures mount.
‘Degree of Accommodation’
“As the economy gradually recovers and global inflationary pressures arise, the degree of accommodation of monetary policy has to be monitored and, if needed, corrected,” Bini Smaghi said in an interview with the daily newsletter Bloomberg Brief: Economics.
The ECB has held its benchmark interest rate at 1 percent since May 2009.
U.S. policy makers “continued to express disappointment in both the pace and the unevenness of the improvements in labor markets,” while also judging the recovery to be on a “firmer footing,” the Federal Open Market Committee said in minutes of its Jan. 25-26 meeting, released Feb. 16. They were divided over whether further evidence of recovery would warrant slowing or reducing $600 billion in U.S. debt purchases to spur growth.
The central bank has left its key rate at zero to 0.25 percent since December 2008 to support the economy. Analysts forecast the rate will rise to 0.5 percent by year-end, according to the weighted average in a Bloomberg News survey.
The dollar had the biggest loss this week, 1.4 percent, among 10 developed-nation currencies in the Bloomberg Correlation-Weighted Currency Indexes.
Krone, Franc Gain
Norway’s krone, a currency linked to oil exports, and the Swiss franc, considered a haven currency, gained the most, the indexes showed. They rose 2.1 percent and 1.9 percent as unrest surged in the Mideast and oil prices climbed.
Egyptian state television said yesterday Iran won permission to sail two naval ships through the Suez Canal in a move Israel called a “provocation.”
“The warships can increase tensions potentially between Iran and Israel, and since Israel is one of the U.S.’s closest strategic allies, that can weigh on the dollar,” said Joe Manimbo, a market analyst in Washington at Travelex Global Business Payments, a currency-exchange network.
Crude oil for March delivery increased 0.7 percent, the most in five weeks, to $86.20 a barrel in New York on concern supplies may be disrupted.
The franc gained for the week versus 15 of its 16 most- traded peers. It rose 3 percent, the most since Dec.3, to 94.46 centimes per dollar and was up 1.9 percent to 1.2935 per euro.
Top Performer
Norway’s krone was No. 1, climbing 3.2 percent to 5.6684 per dollar and touching 5.6654, the strongest in 13 months. It appreciated 2.2 percent to 7.7609 to the euro.
The 17-nation currency rose against the greenback on Feb. 17 as Labor Department data showed applications for unemployment benefits rose to 410,000 in the week ended Feb. 12, exceeding the 400,000 median forecast in a Bloomberg survey.
Retail purchases in the U.S. rose 0.3 percent last month, Commerce Department data showed on Feb. 15, the least since a drop in June. A Bloomberg survey forecast a 0.5 percent gain.
The U.S. economy expanded at a 3.3 percent annual rate from October through December, according to the median estimate in a Bloomberg survey before Commerce Department data due Feb. 25. The rate was estimated in January at 3.2 percent. It was 2.6 percent in the third quarter and 1.7 percent in the second.
Yields Fall
The yen strengthened versus the dollar this week as investors sought the safety of U.S. Treasuries, driving yields down and dimming the attraction of dollar-denominated assets. Yields on U.S. two-year notes decreased nine basis points, the most since the five days ended Sept. 17, to 0.75 percent.
Sterling climbed as pressure increased on the Bank of England to raise its key rate from a record low of 0.5 percent. A Feb. 15 report showed inflation accelerated to double the central bank’s 2 percent target. Bank Governor Mervyn King said the next day inflation will peak this year and ease in 2012. The pound strengthened 1.5 percent to $1.6253.
“Most commentators are at least mildly bullish on the pound,” said John McCarthy, director of currency trading at ING Groep NV in New York. “I’m not sure if it’s justified, because it’s based on rate expectations and King moderated that.”
China’s yuan reached a 17-year high versus the dollar on speculation the nation will allow faster appreciation to tackle inflation and appease trading partners who say it’s undervalued.
The yuan gained 0.21 percent to 6.5732 per dollar as Group of 20 finance ministers and central bankers opened a summit in Paris yesterday in an effort to agree on a common approach to
Cocoa shipments from Cameroon’s main port of Douala declined 59 percent in the week to Feb. 15, according to data e-mailed by the harbor today.
Exports of the beans were 750 metric tons, from 1,850 tons a week earlier, the figures showed. The average price increased to 1,682 CFA francs ($3.47) per kilogram (2.2 pounds), from 1,480 a week earlier, according to Bloomberg calculations using rates published by the country’s Cocoa and Coffee Inter- professional Board.
“We are already in the light-crop season,” said John Atanga, communication officer with the Cocoa Development Authority, by phone from Yaounde, the capital.
A kilogram fetched 1,358 francs in the southwest, one of the highest production zones, Abong Abraham, president of Ekona Farmers’ Cooperative, said by phone today. Farmers sold the beans at 1,370 francs in the Littoral area, 1,370 francs in the center region and at 1,350 francs in the south, according to information e-mailed from the Cocoa and Coffee Information Relay Centers in Bafia, Bertoua, Nkongsamba and Ebolowa.
