8/7/2019 ICCO Monthly Review January 2011 - edited

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COCOA MARKET REVIEW

JANUARY 2011

The current review reports on cocoa price movements on international markets during January 2011.Chart I illustrates price movements on the London (NYSE Liffe Futures and Options) and New York(ICE Futures U.S.) markets in January. Chart II shows the evolution of the ICCO daily price, quoted in US dollarsand in SDRs for the period from November 2010 to January 2011. Chart III depicts the link between the ICCOdaily price and the Dow Jones commodity indexes while Chart IV presents prices of European cocoa products sincethe beginning of the 2010/11 cocoa year.

Chart I: Cocoa bean prices on the London (LIFFE)and New York (ICE) futures markets

January 2011

2800

2900

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3400

3500

04-Jan-11

07-Jan-11

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US$pertonne

1850

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pertonne

New York (at London close) (US$)London (close) ()

Chart II: ICCO daily prices

November 2010 January 2011

2830

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3010

3070

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3190

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ov-10

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ec-10

07-Jan-11

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US$pertonn

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SDRspertonne

US$ per tonneSDRs per tonne

Note: The ICCO daily price for cocoa beans is the average of the

quotations of the nearest three active futures trading months on

NYSE Liffe and ICE Futures U.S. at the time of London close,

converted into US$ and SDRs using the appropriate exchange

rates.

Price movements

In January, the ICCO daily cocoa prices averaged US$3,165 per tonne, up by US$105 compared to theaverage price recorded in the previous month (US$3,060). Prices ranged between US$2,921 and US$3,412.

The cocoa futures markets started the month with a downward trend as a result of reassuring cocoasupplies from West Africa. Indeed, the unresolved political situation in Cte dIvoire was not causing anymajor disruptions to cocoa exports. However, the fall in prices was short-lived. By the middle of the month,the European Union had issued a Council Regulation (No. 25/2011) imposing restrictive measures inCte dIvoire. The European cocoa industry requested clarification from the EU Commission, as the regulationcould be interpreted, de facto, as an export ban on cocoa from Cte dIvoire. As shown in Chart I, prices inboth futures markets edged upwards to 2,191 in London and to US$3,329 in New York by the fourth week ofthe month. This represented an increase of 11% and 13% in London and in New York respectively over pricesrecorded at the start of the year. Moreover, there were reports that Indonesias cocoa output was expected todecrease, mainly due to the excessive rainfall that had occurred during the summer and autumn of 2010 inSulawesi, resulting from La Nia weather conditions. In addition, towards the end of the month, a call for amonth-long ban on Ivorian cocoa exports by one of the parties involved in the political dispute in Cte dIvoiretook its toll on prices. Concerns over the possible short-term tightness of cocoa supplies resulted in thebackwardation structure of the futures market.

8/7/2019 ICCO Monthly Review January 2011 - edited

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