Cocoa prices rose Tuesday on improving demand for the main ingredient in chocolate.
Cocoa for September was up 0.6% at $2,074 a ton on the ICE Futures U.S. exchange, on track for its highest close since June 13. Capital Economics said in a note that cocoa prices have finally turned higher, thanks to a pickup in demand encouraged by the sharp decline in prices over the past year. The firm said it expects that the increased demand will be able to help absorb some of the increase in West African production.
Sucden Financial said technical signals in the market point to apprehension among traders that if the market sees a strong close, it would help confirm a trend toward prices approaching $2,200 a ton.
"Chocolate manufacturers in general have reported improved sales volumes and ideas are that the better sales can continue as chocolate and cocoa are relatively cheap. The charts show that futures are in up trends," Jack Scoville, vice president at Price Futures Group said in a note to clients.
Last week, Hershey Co. reported second-quarter profit rose 39%, beating analysts' estimates, Lindt & Spruengli AG reported strong growth in sales in Europe, the world's largest consumer of chocolate. European processing volumes of raw cocoa beans rose 2.1% in the second quarter year-over-year, slightly outperforming industry expectations, according to data from the European Cocoa Association. In other markets, raw sugar for October was up 1.3% at 15.11 cents a pound, arabica coffee for September lost 0.4% at $1.387 a pound, frozen concentrated orange juice for September was down 0.7% at $1.3075 a pound and December cotton steadied at 68.88 cents a pound.
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(END) Dow Jones Newswires
August 01, 2017 11:41 ET (15:41 GMT)