Cocoa Falls as Gbagbo Orders Exports; Coffee, Cotton Decline

March 10 (Bloomberg) -- Cocoa fell, capping the longest slump in nine weeks, on signs that exports will rise from Ivory Coast, the world’s largest producer. Coffee headed for the biggest drop since August as raw materials slumped.

Ivory Coast President Laurent Gbagbo ordered companies to export cocoa beans by the end of this month or face sanctions, said Ahoua Don Mello, a spokesman for the government. Rival Alassane Ouattara, the internationally recognized winner of a late November election, called for a halt to exports in late January to cut off funds to Gbagbo.

“Today’s drop is a big reverberation of the Gbagbo order,” said Hector Galvan, a senior trading adviser at RJO Futures in Chicago. “Everyone is running now to sell.”

Cocoa for May delivery fell $82, or 2.3 percent, to settle at $3,445 a metric ton at 12:04 p.m. on ICE Futures U.S. in New York. The price dropped for the third straight session, the longest slide since Jan. 6. Earlier, the commodity touched $3,328, the lowest since Feb. 10. The most-active contract has climbed 23 percent since the election.

In London, cocoa futures for May delivery slid 15 pounds, or 0.7 percent, to 2,244 pounds ($3,601) a ton on NYSE Liffe.

Shipments of beans registered at Ivory Coast’s ports for export dropped to 277 tons in the 14 days ended March 3 from 50,738 a year earlier.

Arabica-coffee futures for May delivery tumbled 15.35 cents, or 5.2 percent, to $2.795 a pound in New York, heading for the biggest drop since Aug. 24.

14-Year High

Yesterday, the price reached $2.9665, the highest for a most-active contract since May 1997. Coffee has more than doubled in the past year as global supplies trailed demand.

Commodities headed for the largest decline in almost four months, and equities slid as China’s export growth slowed and Spain’s credit rating was cut.

“The commodities are facing pressure today because of macroeconomic developments,” said Rodrigo Costa, the vice president of institutional sales at Newedge USA LLC in New York. “The fundamentals have not changed overnight.”

In London, robusta-coffee futures for May delivery declined $49, or 1.9 percent, to $2,508 a ton.

Cotton futures for May delivery slid 3.24 cents, or 1.6 percent, to $2.017 a pound in New York. The commodity rose to a record of $2.197 on March 7.

(Source: http://www.businessweek.com/news/2011-03-10/cocoa-falls-as-gbagbo-orders-exports-coffee-cotton-decline.html)