Cocoa Heads for First Weekly Decline in a Month on Fund Selling

(Bloomberg) --

Cocoa declined in New York, heading for the first weekly loss since October, on fund selling following the recent rally.

Prices are down almost 5% this week and have also dropped in London. Cocoa surged last month as a spat between the world’s largest producers in West Africa and chocolate makers roiled the futures market. Money managers had boosted bullish bets to a two-month high by Nov. 24, before prices then retreated. The latest positioning data is due later Friday.

“Given the market’s sizable gains over the past month, a negative shift in global risk sentiment could lead to another wave of long liquidation selling,” The Hightower Report said.

Cocoa for March delivery lost 0.6% to $2,634 a ton in New York. London futures declined 1%.

Ivory Coast’s cocoa farmers on Thursday threatened to withdraw their participation from sustainability programs run by major buyers to pressure them to pay a premium on the crop. Some chocolate companies have been accused of trying to skirt a $400-a-ton charge introduced for this season aimed at raising farmer incomes.

In other soft commodities:

• Sugar and coffee futures declined.

©2020 Bloomberg L.P.