By Carolyn Cui
Cocoa futures fell Friday, testing fresh four-year lows, following an industry report showing lower-than-expected demand in North America during the fourth quarter.
Cocoa for March delivery dropped 1.4% to $2,133 a ton on the ICE Futures U.S. exchange, closing in on a four-year low of $2,126 hit at the end of last year.
Cocoa processors in the U.S., Canada and Mexico reported a 1.1% drop in cocoa beans processed during the fourth quarter of 2016 year over year, the worst fourth-quarter tonnage since 2011.
The 117,588 tons of cocoa beans processed by North American factories in the fourth quarter was also the smallest tonnage in any quarter since the second quarter of 2012 and followssimilarly disappointing data released this week out of Europe. Analysts had been expecting better figures as a result of recently improved margins for processors.
The quarterly data of cocoa beans processed into cocoa powder and other products are considered a barometer for chocolate demand.
Following a bull run for most of 2016, cocoa prices dropped sharply in the fourth quarter and have suffered further losses so far this year, making the cocoa market a solidly short bet for the first time in 4 1/2 years.
Analysts are anticipating a surplus of cocoa this year as weather in West Africa, home to the most production, has been favorable for the development and now harvest of the larger main crop.
In other markets, raw sugar for March was up 0.4% to 20.24 cents a pound, arabica coffee rose 1.2% to $1.5255 a pound in the March contract, frozen concentrated orange juice futures for March fell 1% to $1.6595 a pound and March cotton gained0.3% to 72.92 cents a pound.
Write to Carolyn Cui at email@example.com
(END) Dow Jones Newswires
January 20, 2017 11:28 ET (16:28 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.