COPAL COCOA Info



COPAL COCOA Info [pic]

A Weekly Newsletter of the Alliance of Cocoa Producing Countries

| Health and Nutrition |Business & Economy |

|Cocoa flavanol content varies depending on origin, says Callebaut |Cargill building $100 million cocoa facility in Indonesia |

|Researchers harp on importance of cocoa consumption | |

| |Labour Issues |

|Production and Quality | |

|Cocoa output picking up | |

|Agriterra's cocoa expansion shows its African growth ambitions |Environmental Issue |

| |Hot, Dry Weather spurs cocoa prices |

|The Market |Ivorian cocoa bean quality improves amid good weather |

|Central Cameroon's April Cocoa beans deemed excellent quality for | |

|export |Research & Development |

|CORRECTED-ICE cocoa open interest soars to record as speculators pile| |

|in | |

|NY cocoa may retest support at $2,364 |Promotion & Consumption |

| |COCOBOD moves to increase cocoa price |

|Processing and Manufacturing | |

|Cargill begins constructing cocoa facility in Indonesia |Others |

|Petra’s Cocoa Plants operating before Barry Callebaut Deal (1) |African cocoa producers supported |

In the News (from Newspapers worldwide)

ICCO Daily Cocoa Prices

| | | | | |

| |ICCO Daily Price |ICCO Daily Price |London futures |New York futures |

| |(SDR/tonne) |($US/tonne) |(£/tonne) |($US/tonne) |

| | | | | |

|6th May |1610.02 |2426.31 |1574.05 |2407.33 |

| | | | | |

|7th May |1603.85 |2420.68 |1575.67 |2406.33 |

| | | | | |

|8th May |1601.29 |2417.31 |1564.00 |2403.00 |

| | | | | |

|9th May |1573.47 |2378.75 |1548.33 |2359.67 |

| | | | | |

|10th May |1552.99 |2329.29 |1533.67 |2310.00 |

| | | | | |

|Average |1588.00 |2394.00 |1559.00 |2377.00 |

International Financial Futures and Options Exchange (LIFFE)

London Futures Market – Summary of Trading Activities

(£ per tone)

|Monday |6th May |2013 |  |  |  |  |

|Month |Opening Trans |Settle |Change |High |Low |Volume |

|May  2013 |  |  |  |  |  |  |

|Jul  2013 |  |  |  |  |  |  |

|Sep  2013 |  |  |  |  |  |  |

|Dec  2013 |  |  |  |  |  |  |

|Mar  2014 |  |  |  |  |  |  |

|May  2014 |  |  |  |  |  |  |

|Jul  2014 |  |  |  |  |  |  |

|Sep  2014 |  |  |  |  |  |  |

|Dec  2014 |  |  |  |  |  |  |

|Mar  2015 |  |  |  |  |  |  |

|Average/Totals |  |#DIV/0! |  |  |  |0 |

|Tuesday |7th May |2013 |  |  |  |  |

|Month |Opening Trans |Settle |Change |High |Low |Volume |

|May  2013 |1556 |1563 |0 |1570S |1552 |2,911 |

|Jul  2013 |1561 |1570 |3 |1576S |1558 |9,157 |

|Sep  2013 |1570 |1577 |2 |1582S |1566S |2,928 |

|Dec  2013 |1575 |1580 |2 |1586S |1570S |1,252 |

|Mar  2014 |1574 |1580 |4 |1586S |1567 |1,711 |

|May  2014 |1575 |1583 |4 |1585 |1572S |349 |

|Jul  2014 |1579 |1588 |4 |1592S |1579S |341 |

|Sep  2014 |1585 |1593 |3 |1596S |1585S |81 |

|Dec  2014 |  |1593 |4 |  |  |0 |

|Mar  2015 |  |1594 |4 |  |  |0 |

|Average/Totals |  |1582 |  |  |  |18,730 |

|Wednesday |8th May |2013 |  |  |  |  |

|Month |Opening Trans |Settle |Change |High |Low |Volume |

|May  2013 |1560 |1556 |-7 |1566 |1540S |3,816 |

|Jul  2013 |1567 |1558 |-12 |1571S |1545 |8,607 |

|Sep  2013 |1574 |1565 |-12 |1577S |1554S |1,710 |

|Dec  2013 |1577 |1569 |-11 |1580S |1558S |3,079 |

|Mar  2014 |1577 |1568 |-12 |1580S |1556S |1,366 |

|May  2014 |1565 |1571 |-12 |1582S |1565S |488 |

|Jul  2014 |1569 |1576 |-12 |1585S |1569S |48 |

|Sep  2014 |1591 |1580 |-13 |1591S |1591S |2 |

|Dec  2014 |1583 |1577 |-16 |1583S |1583S |2 |

|Mar  2015 |  |1578 |-16 |  |  |0 |

|Average/Totals |  |1570 |  |  |  |19,118 |

|Thursday |9th May |2013 |  |  |  |  |

|Month |Opening Trans |Settle |Change |High |Low |Volume |

|May  2013 |1553 |1554 |-2 |1574S |1546 |3,479 |

|Jul  2013 |1555 |1542 |-16 |1557 |1539 |10,019 |

|Sep  2013 |1562 |1549 |-16 |1564 |1546S |3,032 |

|Dec  2013 |1565 |1554 |-15 |1569S |1552S |1,860 |

|Mar  2014 |1564 |1553 |-15 |1569S |1551S |2,152 |

|May  2014 |1568 |1557 |-14 |1569S |1555 |317 |

|Jul  2014 |  |1562 |-14 |  |  |0 |

|Sep  2014 |  |1566 |-14 |  |  |0 |

|Dec  2014 |  |1563 |-14 |  |  |0 |

|Mar  2015 |  |1564 |-14 |  |  |0 |

|Average/Totals |  |1556 |  |  |  |20,859 |

|Month |Opening Trans |Settle |Change |High |Low |Volume |

|May  2013 |1544 |1541 |-13 |1557S |1531S |16,778 |

|Jul  2013 |1536 |1527 |-15 |1546S |1527 |17,966 |

|Sep  2013 |1540 |1534 |-15 |1552 |1534S |2,122 |

|Dec  2013 |1550 |1540 |-14 |1559 |1540S |1,855 |

|Mar  2014 |1544 |1538 |-15 |1555S |1538S |1,904 |

|May  2014 |1553 |1542 |-15 |1553S |1542S |217 |

|Jul  2014 |1558 |1547 |-15 |1558S |1551S |75 |

|Sep  2014 |  |1551 |-15 |  |  |0 |

|Dec  2014 |  |1551 |-12 |  |  |0 |

|Mar  2015 |  |1552 |-12 |  |  |0 |

|Average/Totals |  |1542 |  |  |  |

|  |  |  |  |  |7439 |

New York Board of Trade

(New York Futures Market – Summary of Trading Activities)

(US$ per tone)

|Monday |6th May |2013 |  |  |  |  |

|Month |Opening Trans |Settle |Change |High |Low |Volume |

|May  2013 |0 |2390 |-14 |0 |0 |0 |

|Jul  2013 |2412 |2402 |-14 |2415 |2385 |7,631 |

|Sep  2013 |2422 |2412 |-14 |2425 |2394 |2,326 |

|Dec  2013 |2409 |2422 |-11 |2430 |2406 |1,494 |

|Mar  2014 |2432 |2427 |-8 |2435 |2422 |205 |

|May  2014 |2438 |2432 |-6 |2438 |2432 |21 |

|Jul  2014 |2443 |2437 |-6 |2444 |2437 |21 |

|Sep  2014 |0 |2441 |-5 |0 |0 |5 |

|Dec  2014 |0 |2450 |-9 |0 |0 |5 |

|Mar  2015 |0 |2457 |-9 |0 |0 |0 |

|Average/Totals |  |2427 |  |  |  |11,708 |

|Tuesday |7th May |2013 |  |  |  |  |

|Month |Opening Trans |Settle |Change |High |Low |Volume |

|May  2013 |2364 |2384 |-6 |2364 |2364 |10 |

|Jul  2013 |2392 |2396 |-6 |2420 |2388 |15,262 |

|Sep  2013 |2395 |2404 |-8 |2428 |2395 |4,414 |

|Dec  2013 |2411 |2413 |-9 |2435 |2410 |2,101 |

|Mar  2014 |2421 |2418 |-9 |2433 |2416 |1,138 |

|May  2014 |2426 |2422 |-10 |2445 |2425 |203 |

|Jul  2014 |2430 |2427 |-10 |2444 |2425 |288 |

|Sep  2014 |0 |2431 |-10 |0 |0 |3 |

|Dec  2014 |0 |2440 |-10 |0 |0 |1 |

|Mar  2015 |0 |2447 |-10 |0 |0 |1 |

|Average/Totals |  |2418 |  |  |  |23,421 |

|Wednesday |8th May |2013 |  |  |  |  |

|Month |Opening Trans |Settle |Change |High |Low |Volume |

|May  2013 |2362 |2379 |-5 |2407 |2362 |6 |

|Jul  2013 |2390 |2391 |-5 |2410 |2362 |16,124 |

|Sep  2013 |2398 |2398 |-6 |2416 |2373 |3,764 |

|Dec  2013 |2410 |2407 |-6 |2425 |2384 |2,398 |

|Mar  2014 |2412 |2413 |-5 |2431 |2390 |826 |

|May  2014 |2421 |2418 |-4 |2435 |2400 |134 |

|Jul  2014 |2425 |2423 |-4 |2435 |2400 |63 |

|Sep  2014 |0 |2427 |-4 |0 |0 |11 |

|Dec  2014 |0 |2436 |-4 |0 |0 |17 |

|Mar  2015 |0 |2443 |-4 |0 |0 |6 |

|Average/Totals |  |2414 |  |  |  |23,349 |

|Thursday |9th May |2013 |  |  |  |  |

|Month |Opening Trans |Settle |Change |High |Low |Volume |

|May  2013 |2360 |2336 |-43 |2360 |2358 |8 |

|Jul  2013 |2398 |2349 |-42 |2408 |2335 |15,996 |

|Sep  2013 |2412 |2357 |-41 |2412 |2346 |4,046 |

|Dec  2013 |2407 |2366 |-41 |2423 |2359 |1,885 |

|Mar  2014 |2424 |2373 |-40 |2428 |2374 |501 |

|May  2014 |2427 |2377 |-41 |2431 |2380 |189 |

|Jul  2014 |2433 |2383 |-40 |2435 |2390 |41 |

|Sep  2014 |0 |2387 |-40 |0 |0 |1 |

|Dec  2014 |0 |2395 |-41 |0 |0 |1 |

|Mar  2015 |0 |2402 |-41 |0 |0 |0 |

|Average/Totals |  |2373 |  |  |  |22,668 |

|Month |Opening Trans |Settle |Change |High |Low |Volume |

|May  2013 |2320 |2298 |-38 |2320 |2320 |1 |

|Jul  2013 |2340 |2300 |-49 |2340 |2298 |18,355 |

|Sep  2013 |2350 |2308 |-49 |2350 |2307 |5,714 |

|Dec  2013 |2355 |2318 |-48 |2355 |2316 |3,143 |

|Mar  2014 |2350 |2326 |-47 |2361 |2324 |1,388 |

|May  2014 |2356 |2330 |-47 |2365 |2330 |159 |

|Jul  2014 |2360 |2335 |-48 |2360 |2340 |50 |

|Sep  2014 |0 |2339 |-48 |0 |0 |18 |

|Dec  2014 |0 |2347 |-48 |0 |0 |0 |

|Mar  2015 |2380 |2354 |-48 |2380 |2371 |20 |

|Average/Totals |  |2326 |  |  |  |

|  |  |  |  |  |5245 |

News

Cocoa flavanol content varies depending on origin, says Callebaut



By Oliver Nieburg

06-May-2013

Barry Callebaut’s innovation department has revealed that the level of cocoa flavanols, which are associated with a string of positive health effects, vary depending on where beans are sourced.

The company has conducted in-depth screening on flavanol content in cocoa beans from different origins.

It is keeping precise details under wraps, but told during a site visit that beans from Central and South America were the optimum areas because of the soil, climate and the strain of beans.

Herwig Bernaert, R&D innovation at Barry Callebaut, said: ”The flavanol content ranges from 3% to 11% flavanols in non-cured dried beans. Thus selecting the right area is crucial in making high flavanol products.”

Health benefits

Cocoa flavanols have been associated with a series of health benefits including improved cardiovascular health, cognitive function and blood flow.

The European Food Safety Authority (EFSA) is currently finalizing a health claim from Barry Callebaut to say cocoa flavanols help the “maintenance of the elasticity of blood vessels”. See HERE.

Callebaut hopes to use the claim on products made through its flavanol-preserving Acticoa method, a process that maintains 80% of cocoa flavanols usually destroyed in the chocolate-making process.

Type of cocoa

“The amount of flavanols is linked to type of cocoa and the area combined,” said Bernaert.

“For instance in Brazil, for the cocoa bean type PH16 the flavanol content varies between 5% and 9%. So it is not about saying a specific origin, it is about selecting a good farmer partner which is located in an optimal area, has the right cocoa clone and has a good control over its process to preserve the flavanols untill the dried bean.”

Production process

He said that the key to high-flavanol cocoa was selecting the right cocoa bean and then optimizing the production process to ensure flavanols are not lost.

“During the production process from bean to chocolate, the product undergoes several process steps which has an impact on the flavanol stability,” he said.

Traditional processing: No clear benefits

A recent study by Chin et al. in the journal Heritage Science dismissed the idea that traditional Mesoamerican processing could yield higher antioxidant activity and flavanol content than modern methods.

The study compared cocoa consumed by native peoples of Mesoamerica to cocoa from the Ivory Coast, the top producing nation.

Beans were either processed using pilot scale modern techniques including ball mill grinding or through a traditional method of roasting whole beans on an earthenware comal heated with wood charcoal, then grinding the beans to a paste using a stone metate and mano (as pictured).

The researchers found unprocessed Mexican Lavado cocoa beans had the highest antioxidant capacity and flavanol content, but no clear advantage was seen in traditional techniques, despite some extra presence in Ivorian beans processed traditionally.

Researchers harp on importance of cocoa consumption

Nigerian Tribune

By Femi Ibirogba

07 May 2013

Nigerians have been urged to eat raw cocoa products to maximise immense health benefits embedded in the tropical product.

Cocoa is a produce with many minerals and supplements discovered and named ‘cacao,’ meaning food of the gods, by the Aztects of Central South America several centuries ago, because of its healing and energy-giving potential.

Nigeria started producing cocoa in commercial quantity since 1874, when it was first introduced by Chief Squiss Ibaningo, who brought the first seedlings from Fernado Po and planted them in Ipobo, Rivers State.

Ironically, Europeans have since come to appreciate the health benefit derivable from cocoa consumption as evident in the volume of the product being shipped from Africa to Europe, which consumes the largest portion of the cocoa produced in the world. Though Africa now produces about 70 per cent of the world cocoa output yearly, it consumes just about 3 per cent.

Experts at a one-day awareness programme on benefits of cocoa consumption, organised at the weekend by Oluji Cocoa Products Ltd at Supreme Management Training Centre, Ibadan, unanimously said that Nigerians should cultivate the habit of consuming pure cocoa because of its tremendous health-boosting contents such as flavonoids (anti-oxidants) and micronutrient-magnesium, which deficiency is linked with hypertension, heart diseases, diabetes and joint problems.

Delivering a speech on the occasion, a director at the Cocoa Research Institute of Nigeria (CRIN), Dr Layi Olubamiwa, said he could categorically confirm, as a result of scientific exercises and consumption of cocoa, that raw cocoa consumption boosts health significantly, saying it reduces frequencies of malaria and reduces stress, especially in this part of the world.

Dr (Mrs) Lelia Dorgo of CRIN’s research unit also encourage Nigerians to take pure cocoa products, advising that though milk and sugar could be added, anti-oxidants in cocoa are more potent and health-benefitting when taken raw, urging men to consume cocoa to boost their libido.

Managing Director of Oluji Cocoa Products, Akin Olusuyi, therefore, called on the government in the cocoa-producing states and the Federal Government to take active interests in the campaign because of the benefits in it and the welfare of the citizenry.

“The general well-being of Nigerians can take a turn for the better if they are properly educated and mobilised to cultivate the cocoa eating habit. This will impact positively not only on the general health of the citizens, but also that of the nation. After all, a nation is as healthy as her citizens. On the economic side, this will encourage value addition to cocoa and expand the local processing capacity with its attendant employment generation and increase in revenue and GDP,” Olusuyi said.

Cocoa output picking up

Reuters

7 May 2013

Exporters estimated that around 23,000 tonnes of cocoa beans were delivered between April 29 and May 5. Picture: AFP

Abidjan - Farmers in cocoa-growing regions forecast a shorter than usual harvest in some areas despite the good rainfall and sunshine.

The good weather in Ivory Coast in past weeks could improve the quality of mid-crop beans.

Harvesting of the April-to-September mid-crop in the world's top grower started slowly after dry, hot conditions at the beginning of the year led to many flowers and small pods withering.

But output is picking up and most traders and exporters are predicting an abundant mid-crop harvest.

Exporters estimated on Monday that around 23,000 tonnes of beans were delivered to the West African state's two ports of Abidjan and San Pedro between April 29 and May 5, up from 14,000 tonnes in the same week last year.

In the centre-western region of Daloa, responsible for around a quarter of Ivory Coast's national output, farmers reported two good showers after two weeks without rainfall.

"It's good. We've waited a long time for this kind of rain. If the rain continues that will improve the quality of beans in the next weeks," said Daloa farmer Attoungbre Kouame.

"The cocoa is coming out. Right now there are very few flowers or cherelles (small pods) on the trees, so the harvest will drop off dramatically in July," he said.

Similar growing condition was reported in the eastern region of Abengourou, where an analyst reported 28 mm of rainfall, up from 22 mm the previous week.

"There is cocoa, but not a lot like last season during the same period. The mid-crop (harvesting) will be short here," said Marcellin N'Da, who farms on the outskirts of Abengourou.

"The next main crop will start early, because the foliage is turning green. That means the trees are preparing new flowering for June that will produce the pods we'll start cutting in September," he said.

In the western region of Soubre an analyst reported 17 mm of rainfall compared with 45 mm the week before.

"The (cocoa) volumes coming out of the bush are increasing and we are happy that the sun is helping us dry the beans," said Soubre farmer Salam Kone.

"The buyers complain less about the size of the beans," he added.

Farmers in the western region of Duekoue reported three abundant showers mixed with sunshine.

"There's good rain and there's sun. There won't be a sharp stop to the mid-crop here.

"The quantities may decrease in July, but there won't be an interruption," said farmer and cooperative manager Amara Kone.

In the coastal region of San Pedro, farmers continued to complain of a lack of rainfall. "There's no rain here. And the sun is trying to kill us," said farmer Labbe Zoungrana. "We no longer have any illusions. We'll have very little cocoa for the mid-crop. We are just praying now that the extreme heat doesn't kill our trees," he said.

Agriterra's cocoa expansion shows its African growth ambitions

Proactive Investors UK

By Giles Gwinnett

May 10 2013,

Pan African food producer Agriterra's (LON:AGTA) recent expansion of its cocoa farming efforts is a good example of the firm's current focus on investment, now in full swing.

The firm is looking to build the foundation on which it grows and is pumping resources and funds into its core operations.

From initially building what was primarily a cocoa trading business, it now has bought its own 1,200 hectare plantation in Sierra Leone and earlier this month, unveiled a large scale acceleration of efforts.

Clearing the site is ongoing and Agriterra expects to have planted the whole 1,200 hectare by the fourth quarter of next year.

Meanwhile, subsidiary Tropical Foods is in "advanced" negotiations to try and get its hands on a further 1,600 hectares north east of the current site to allow planting in 2016 and an additional 1,550 hectares to the south-east, which will be earmarked for coffee.

To support the plantation's development, a new cocoa nursery is also being planned.

Agriterra's chief executive Andrew Groves tells Proactive the aim is to secure 6,000 hectares in the next three years and is in no doubt that the scheme bolsters the group's long term position.

"We are now the largest agri business in Mozambique - with the milling and the beef. We wanted to expand into something, which over time has good long term cash flow, which is cocoa," he says.

"We can forward sell it. There's a massive off-take market and if you have your own plantation, it's like an annuity from a cash flow point of view."

The plantation gives the firm secure cash flow in the next three-four years, he adds.

And the timing couldn't be better. The company pointed out in its last statement that the International Cocoa Organisation forecasts demand for cocoa will exceed production by 45,000 tonnes in the season to September 2013.

Agriterra's expansion strategy into its core revenue generating businesses of cocoa, beef and maize was also given a shot in the arm earlier this year - with a US$28 million payout.

It came from Marathon Oil Corporation after the sale of Agriterra's 20% legacy interest in the South Omo oil block in Ethiopia and leaves the firm in the enviable position of having no debt and a growing asset base - its net asset value now stands at US$64.5 mln.

Meanwhile, its Mozbife operation in Mozambique is making great strides and is now eyeing a national chain of butchers shops servicing its expanding cattle herd - which aims to have a head count of 10,000 by 2015.

The firm has now a finished abattoir in Chimoio and to boost its margins, has opened two shops - one in Chimoio and one in Tete selling beef produce.

Another four retail units are scheduled to open this year, Groves tells Proactive, while the firm is hoping to roll out 20 butchers shops across the country, which should really boost the group's top line.

The third revenue stream - the group's maize and milling operation - is also doing well.

It saw improved revenues in 2012 after reduced sales in 2011 after a strong harvest reduced demand.

For the six months to November 30 last year, the group saw revenue from continuing operations shoot up to US$11.49mln from US$5.29mln the year before, with revenue for the year to May 31, 2012 coming in at around US$13 million.

And Groves is confident that 2013 results will tell the same story.

"I think we are extremely undervalued. We've got no debt. We've got a huge asset base and business is growing," he added.

The chief executive also pointed out that as Africa itself grows on the world stage, economically and socially, Agriterra could not be in a better place to capitalise.

"If you look at the rest of the world, there's a declining economy whereas if you look at the African states, it's different. Mozambique's pushing 11/12% growth, Sierra Leone's got huge growth, most of them have (the states)- and it's not leveraged growth - it's cash growth, which makes a big difference.

"I think it's the place to be. You've got a fast-growing consumer market and it keeps increasing," he says, also highlighting the oil and gas discovered in Mozambique along with coal.

"In the last ten years, Africa has changed completely and I think Agriterra's a good foundation to capitalise on that."

To that end, Groves says the company is always on the lookout for further acquisitions, though nothing has as yet come "across the radar".

"We'd look at further acquisitions but they've got to be earnings accretive. We're not going to go into too much greenfield stuff where we've got to plough $10/$20 mln into greenfield business but if we can buy an earnings-accretive business and finance it with cheap debt we'd probably look at doing that."

So there is much to look forward to as Agriterra continues to grow and furthers its reach into Africa's food production business.

Central Cameroon's April Cocoa beans deemed excellent quality for export

4-traders (press release)

By Emmanuel Tumanjong

05/07/2013

YAOUNDE, Cameroon--Cocoa beans produced in Cameroon's central region in April were faintly smaller than those harvested in March, but were deemed excellent for export by quality controllers at the Douala port who spoke to Dow Jones Newswires Tuesday.

According to eight commodity controllers from three of the country's six quality-checking firms, the good quality of the April beans was attributed to the very favorable weather.

The weighed crop recorded between 89-91 beans per 100 grams for April's central Cameroon cocoa harvest, smaller than the 86-89/100g beans measured in March, the quality checkers said.

The quality-checking firms are certified independent companies, brought in by the government to ensure that Cameroon's cocoa and coffee quality are checked to meet international standards, before they enter the world markets.

Central Cameroon accounted for nearly 40% of Cameroon's annual cocoa output of 220,000 metric tons in the 2011-12 season, according to government and industry figures.

The controllers said its April cocoa output had good moisture levels of 8-9%, and was free of mold, despite the slight rainfall. "There was enough sunshine to dry the cocoa beans," said a controller.

Although there was regular rainfall, which boosted the month's harvest, sunshine was also strong so the farmers could dry their cocoa naturally.

CORRECTED-ICE cocoa open interest soars to record as speculators pile in

Reuters

By Marcy Nicholson

May 8, 2013

NEW YORK, May 7 (Reuters) - Speculators are on a cocoa buying frenzy, pushing open interest in U.S. futures to record highs on chart-based buy signals and hope that improving global economic conditions will revive demand, dealers said.

The rapid rise in open interest, which reflects the number of outstanding contracts in the benchmark ICE Futures contract, suggests that the latest 19 percent rally in prices since March has been fueled largely by bullish speculators taking new long positions, rather than by bearish players covering shorts.

There's only one problem: Many of the market's veterans see little cause for upbeat sentiment and expect the market to soon correct lower. Supplies from the top grower Ivory Coast are shipping regularly, weather risks have abated, and Ivory Coast and No. 2 grower Ghana have been seen selling regularly in the market.

Some say cocoa may simply be garnering new attention by the process of elimination - other commodities, many of which slumped through April, look even less appealing.

"We don't see the bullish arguments compelling at the moment, but cocoa has a story and these days the specs don't have too many commodities with a potentially bullish story," said Peter G. Johnson, president of trade house and processor Transmar Group in Morristown, N.J.

"Such a fast build-up would suggest a radically bullish and sudden change in the fundamentals, which we don't see," said Johnson.

Johnson said this gives rise to "an enhanced risk of a market correction".

Total ICE cocoa futures open interest rose to 221,328 contracts on May 6, a record high with a notional value of $530 million based on current outright prices. That open interest is up nearly 12 percent from a month ago and 24 percent from a year ago, exchange data showed on Tuesday. Graphic: link.hyp87t

The rise in positions continued even as prices started to pull back from their highest since last December.

There is little doubt that the run-up in open interest stems largely from big hedge funds and other speculative investors rather than hedgers or merchants. Meanwhile the commercials have been adding to their net short position for six weeks, bringing it to the biggest since December at more than 71,000 lots, U.S. Commodity Futures Trading Commission data showed.

CFTC data showed on Friday that "non-commercial" speculators boosted their net long position in ICE cocoa futures and options to the biggest in nearly five years at nearly 32,000 contracts in the week ended April 30.

Commercial firms have been "selling like hot cakes" to speculators, who may be betting that an upturn in the European economy stirs demand for cocoa butter, says Shawn Hackett, president of Hackett Financial Advisors in Boynton Beach, Florida. "I believe the specs are betting that improved sentiment in European economic growth will break lose some pent-up demand for cocoa butter," Hackett said.

This combination of a large net long position by speculators and large net short position by commercials could be setting the market up for a violent fall by as early as mid-June, as such extreme conditions rarely last more than 40 to 45 days, Hackett said.

"Speculators don't do anything calmly. I would expect a violent setback when it does occur in cocoa," Hackett said, noting this is pending any unforeseen event such as a detrimental turn in crop weather.

The benchmark July cocoa futures contract on ICE climbed to a 4-1/2-month high at $2,437 per tonne on May 3, up nearly 20 percent from two months ago from a nine-month low at $2,034 per tonne.

The market has since eased off last week's peak and closed down 0.2 percent at $2,396 on Tuesday.

To be sure, even the bears see some reasons for gains: a high mid-crop minimum price set by the Ivory Coast may restrict supply in late summer; dry weather there may have damaged the crop; both Ivory Coast and Ghana are believed to have already sold a significant portion of their crops.

Some debate that the fundamental argument is just a rationalization of technically driven trades after prices broke through the 200-day moving average for the first time this year, and then soared above the 50 percent Fibonacci retracement. "I really think it is all technical based buying, there is no supply-side issue," said one trader. "I think the top is in and I am looking for the market to trade to $2,300-$2,250."

NY cocoa may retest support at $2,364

Business Recorder (blog)

By Shoaib-ur-Rehman Siddiqui

09 May 2013

SINGAPORE: New York July cocoa may retest support at $2,364 per tonne, and a break below which will lead to a further loss to $2,318.

Obviously, the drop from the May 3 high of $2,437 is against an uptrend rising from the April 4 low of $2,126, as it paused around $2,364, the 23.6 percent Fibonacci retracement.

Compared to the previous wave B, which retraced about 50 percent of the gain from the March 7 low of $2,046 to the April 1 high of $2,212, the current correction could be too shallow to finish.

The correction is deeper and has lasted a longer time than all the preceding ones on the trend from $2,126. It seems the trend will be further reversed.

Most likely, the correction will reach $2,318, the 38.2 percent retracement.

No information in this analysis should be considered as being business, financial or legal advice. Each reader should consult his or her own professional or other advisers for business, financial or legal advice regarding the products mentioned in the analyses.

Cargill begins constructing cocoa facility in Indonesia

Baking Business (registration

By Jeff Gelski

5/8/2013

JAKARTA, INDONESIA – Cargill broke ground May 7 on a cocoa processing plant in Gresik, Indonesia, that should become operational by mid-2014. The facility will mark Cargill’s first cocoa processing plant in Asia.

“We are excited to be taking this step to strengthen our cocoa operations on the ground in Indonesia,” said Jos de Loor, president of Cargill Cocoa & Chocolate. “We have seen a significant growth in demand for cocoa products amongst our customers across the region. This investment will enable us to support the growth of the local cocoa sector, process local Indonesian beans and provide high-quality cocoa products to serve the growing needs of our customers in Asia.”

The planned facility, a $100 million investment, should be able to process 70,000 tonnes of cocoa beans into a range of tailored products for customers in the Asian market. The products include cocoa liquor and butter as well as Cargill’s Gerkens cocoa powders. Cargill will create 200 new jobs in Indonesia and additional positions in its existing research and development application centers in Kuala Lumper, Malaysia, and Beijing.

Petra’s Cocoa Plants operating before Barry Callebaut Deal (1)

Businessweek

By Isis Almeida

May 09, 2013

Singapore-based Petra Foods Ltd. (PETRA) said its cocoa processing plants are still operating before a proposed acquisition by Barry Callebaut AG (BARN), the world’s biggest maker of bulk chocolate and a supplier to Nestle SA.

Business is being conducted “as usual right up to the expected completion of the transaction in June or July 2013,” Wrisney Tan, a spokeswoman for the company, said in an e-mailed response to questions from Bloomberg News about the status of its cocoa grinding plants. The company said it was unable to make further comments about the transaction.

Cocoa processing in Asia fell 11 percent in the first three months of the year to 140,062 metric tons, the lowest in at least nine quarters, according to the Cocoa Association of Asia. That prompted speculation some factories in the region had slowed down processing or temporarily closed.

Delfi Cocoa (Europe) GmbH, owned by Petra Foods, is operating its plant in Hamburg “closer to full capacity,” Karel Menu, the company’s managing director, said in an e-mailed response to questions by Bloomberg News yesterday. The plant had slowed processing in the second half of last year.

Barry Callebaut agreed to buy Petra Foods’s cocoa ingredients unit in December for $950 million. The sale will include seven factories in Malaysia, Indonesia, Thailand, Brazil, Mexico, Germany and France and sales offices in Singapore, Netherlands and the U.S.

Cargill building $100 million cocoa facility in Indonesia

Reuters

May 7, 2013

CHICAGO (Reuters) - Agribusiness giant Cargill Inc said on Tuesday it began building a $100 million cocoa processing facility in Indonesia to meet growing demand in Asia for chocolate and other cocoa products.

This plant, which is expected to open by mid-2014, will process about 70,000 tonnes of cocoa beans a year for shipment to Cargill's customers in Asia, where rising incomes have broadened demand for luxury foods and goods. Cargill said products shipped will include cocoa liquor and butter as well as the company's Gerkens brand cocoa powders.

"We have seen a significant growth in demand for cocoa products amongst our customers across the region," Jos de Loor, president of Cargill's Cocoa and Chocolate business, said in a statement.

The facility under construction is in Gresik, in the East-Java region of Indonesia. It will create about 200 jobs in Indonesia and additional positions in Cargill's research centers in Kuala Lumpur, Malaysia, and Beijing, China, the company said.

Cargill, which said it has been buying Indonesian cocoa since 1995, intends to train more than 1,300 Indonesia farmers to improve productivity and bean quality. The company now operates two cocoa buying stations in the country and, once the Gresik facility is operating, will double the quantity of local cocoa beans it purchases.

"We recognize that in order to meet the growing demand from our customers and to support the future of cocoa farming, we must invest in our own operations and in the supply chain," De Loor said.

The expanded operations in Indonesia will complement Cargill's cocoa facilities in Western Europe, Vietnam, Cameroon, Ghana, Côte d'Ivoire, Brazil and the United States, the company said.

Cargill and other members of the Cocoa Sustainability Partnership, which aims to boost cocoa development in Indonesia, met on March 26 to study ways to improve crop farming and yields and lift Indonesia cocoa output to 1.5 million tonnes by 2020, group chairman Ruud Engbers said in April. Engbers also heads Mars Symbioscience Indonesia, a unit of privately owned chocolate giant Mars Inc.

Disease and adverse weather have hampered supplies for years in Indonesia, where small producers own about 95 percent of cocoa plantations and the government is struggling to revive the industry through a $350 million program.

The 22 members of the CSP group, launched in 2006, also include Singapore-based Petra Foods and Olam International Ltd , soft commodity giant Armajaro Trading Ltd, and the Indonesian Cocoa Association.

Hot, Dry Weather spurs cocoa prices

Daily Markets (press release)

By OptionsXpress

May 7, 2013

Cocoa has been one of the top performing commodity markets in recent weeks due to the adverse growing conditions in West Africa. After very weak Q1 European grindings and Asian demand, confectioners have indicated that European activity has picked up. The combination of smaller output and better demand has bucked the trend of weak fundamentals in the softs market lately. Thus far, the Euro has only been able to post modest gains versus the greenback. If the currency can perform more strongly versus the Dollar, Cocoa prices could heat-up once again. The bearish divergence between price and RSI hints at a possible reversal. However, it is difficult to gauge when the market will reverse, if it does, and the scope of the move, so traders may look to the chart to give a more concise reversal pattern.

Fundamentals

West African mid-crop production is expected to fall short of earlier forecasts, which has supported prices over recent weeks. It is not only the size of the mid-crop that has been a cause for concern, but also the quality of Cocoa beans after the hot, dry weather. The mid-crop harvest has begun, and some traders are reporting undersized beans and lower output. Pockets of the growing region are expected to see scattered rainfall over the next week, but the rain is too little, too late for most farmers. The demand portion of the equation has been somewhat surprising for many market observers. After a disappointing first quarter, it appears that demand has ramped-up. Several European confectionary firms have reported better revenue streams from the Eurozone, suggesting that European demand could compensate for softer Asian figures. The British Pound has been stronger versus the Dollar in recent weeks, and the Euro has been in a slow grind higher versus the greenback, which is likely supportive for prices.

Technical Notes

Turning to the chart, we see the July Cocoa contract trading above resistance at the 2500 level. After breaking through the level, prices have consolidated over the past several sessions. Prices have also moved above the 50% retracement of the sell-off from September highs to early March lows. The next resistance levels can be found at the 61.8 % retracement at 2462.5 and 2525. The 14-day RSI remains overbought, but the oscillator has been falling, even as prices have climbed, creating bearish divergence. The divergence can be seen as a hint that the uptrend may be set to reverse.

Ivorian cocoa bean quality improves amid good weather

AgraNet (subscription)

May 08 2013

GOOD rainfall and sunshine last week in most of Ivory Coast's main cocoa growing regions will help improve the quality of mid-crop beans, but farmers this week forecast a shorter-than-usual harvest in some areas.

Harvesting of the April-to-September mid-crop in the world's top grower started slowly after dry, hot conditions at the beginning of the year led to many flowers and small pods withering.

COCOBOD moves to increase cocoa price

GhanaWeb

8 May 2013

In an attempt to attract high prices for cocoa on the international market, the Ghana Cocoa Board (COCOBOD) and its counterparts in other cocoa producing countries, have agreed to increase annual output of the commodity within the next couple of years while improving local consumption.

This is to ensure that the quantum of the commodity that is exported to the international market is reduced to warrant an appreciation in the price.

According to Dr Yaw Adu Amponsah, Deputy CEO of COCOBOD, who explained the move to journalists in Accra, the regulator of the cocoa industry was stepping up efforts to engage cocoa companies, as well as government agencies associated with cocoa consumption, to promote local consumption of the commodity.

He indicated that all members of the Alliance of Cocoa Producing Countries (COPAL) had resolved to get the best price for the commodity on the world market henceforth.

Originally established in 1962, COPAL’s members included Ghana, Nigeria, Brazil, Ivory Coast and Cameroon, among others.

Dr Amponsah further said: “If the cocoa stock levels go high, the prices come down. Therefore, if cocoa-producing countries encourage local consumption of the commodity, the stock levels get reduced and the general price levels tend to appreciate because of the quantum of export.”

But currently the membership has increased to 10, with the new members being the Dominican Republic, Gabon, Malaysia, Sao Tome and Principe and also Togo. The member countries of the Alliance account for approximately 75 percent of total world cocoa production.

COCOBOD projected an annual production target of 850,000 metric tonnes of cocoa beans for the 2012/2013 crop season.

This was after it signed a $1.5 billion loan agreement with 31 local and international banks for cocoa purchases in the upcoming season.

The production target remains unchanged and 250 thousand tonnes short of the historic 1 million tonnes production in the 2010/2011 season.

“Our target is to buy about 850,000 tonnes in the coming season, both main and light (crops),” COCOBOD spokesman Noah Amenyah said.

Ghana produced a record one million tonnes of cocoa a couple of years back buoyed by good weather and improved farming techniques, but has seen output slip.The daily price of cocoa per tonne as quoted by the International Cocoa Organisation (ICCO) as of May 2, this year was US$2425.43.

African cocoa producers supported

Coastweek

May 10, 2013

ACCRA (Xinhua) -- The Common Fund for Commodities (CFC) and the International Cocoa Organization (ICCO) are supporting five African cocoa-producing countries to fight major pests and diseases that threaten the crop.

The 3-million-U.S.-dollar Integrated Pest Management (IPM) project was launched on Monday at a West and Central African Regional Workshop attended by officials from Ghana, Cameroon, Nigeria, Cote d’Ivoire and Togo. It is under the theme “Controlling Indigenous Pests and Diseases and Preventing the Introduction of Exogenous Ones.”

“The world cocoa economy is facing renewed challenges both on supply side and on the demand side of cocoa,” Executive Director for ICCO Jean-Marc Anga observed.

“Unfortunately, Customs and Immigration Services cannot stop the foreign pests and diseases from crossing international boundaries and unless there is a concerted effort at the regional level, all cocoa-producing countries will face the same future,” he maintained.

The ICCO boss said it is essential to develop and implement this strategy to reduce the spread of indigenous cocoa pests and diseases and introduce measures to respond to the intrusion of alien pests and pathogens.

Two major traditional cocoa diseases and pests, namely Miridis (Black Pod) and Cocoa Swollen Shoot Virus Disease (CSSVD), affect the production of cocoa in Africa, whilst the Witches Broom and Frosty Pod diseases impact negatively on the crop in Latin America. These pests and diseases together cause 40 percent loss in total annual global cocoa production.

Although cocoa pests and diseases follow a regional pattern of distribution and are indigenous to specific geographic areas, experts fear current developments in travel, communication and commodity trade could pose a greater risk to new cocoa regions and continents.

Africa accounts for an average of 2.7 million tonnes or 70 percent of annual world cocoa production which could reach a little over 4 million tonnes this year, Jean-Marc Anga told Xinhua.

“The threat posed by the introduction of exogenous (foreign) pests and diseases to Africa cocoa production is evident, while the consequences of an outbreak would be devastating,” said the concept paper for the workshop.

“We live in a global village and the risks of dangerous invasions by pests and diseases are extremely high,” Board Chairman of the Ghana Cocoa Board (COCOBOD), Percival Kuranchie said in his message to participants.

He believed the project needed support to institute the necessary preventive measures against invasions of exogenous pests and diseases, and called for regional and international collaboration to address the problem.

The Chief Executive Officer of the COCOBOD, Anthony Fofie, said whilst Ghana, second largest cocoa producer in the world after neighboring Cote d’Ivoire, had made strides in managing cocoa diseases and pests through the National Cocoa Pests and Diseases Control Program (CODAPEC), key challenges remained.

These, he said, included getting farmers to use only approved pesticides and the development and release of disease and pest- resistant varieties. He assured the program coordinators of the support of the COCOBOD in the implementation of the project in Ghana.

The regional chief cocoa farmer in southern part of Ghana’s Western Region, Nana Johnson Mensah, told Xinhua that the program was welcome news since it would help farmers to increase their yield.

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• ICCO DAILY COCOA PRICES

• LONDON (LIFFE) FUTURES MARKET UPDATE

• NEW YORK (ICE) FUTURES MARKET UPDATE

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ISSUE NO. 543 6TH – 10TH MAY 2013

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