Cocoa futures rose Tuesday after the world's largest cocoa grower granted fewer export licenses for the 2017/2018 season as growers struggle with low prices.
Cocoa for December delivery was up 2.2% at $2,082 a ton on the ICE Futures U.S. exchange, breaking higher from a relatively tight range to close at its highest level since June 12.
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"We've had some clients dipping in and taking the long side. Early last week and again this morning are whispers that demand is getting stronger and stronger getting into this quarter," said Peter Mooses, a senior market strategist at RJO Futures in Chicago.
Wires services in Ivory Coast were reporting that the Coffee and Cocoa Council had granted 72 export licenses, compared with 93 last season. At the same time, news reports out of Ghana, the second-largest growing region, announced a cooperative agreement with Ivory Coast aimed at boosting prices.
BMI Research said in a note Monday that lower cocoa prices are expected to constrain export growth in Ivory Coast in the coming months. In 2016, the firm said, cocoa was 55.2% of the country's total export value.
Traders were looking ahead to the 2018 season, expecting a drop in production after weak earnings this year constrained the income farmers will have to invest in next year's cocoa crops. Mr. Mooses said that has cocoa buyers coming to market now over concern that prices will rise next year. He has been closely watching the March and May contracts, he said.
Raw sugar for March was off 1.9% to end at 14.04 cents a pound, arabica coffee was down 1.4% to settle at $1.2545 a pound, frozen concentrated orange juice for November rose 1.5% to settle at $1.553 a pound and December cotton lost 0.1% to end at 67.52 cents a pound.
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(END) Dow Jones Newswires
October 03, 2017 17:15 ET (21:15 GMT)