(Updates with analyst quote in fourth paragraph.)
Sept. 16 (Bloomberg) -- Money managers boosted bullish bets on cocoa traded in London to a record as supplies are set to trail demand for a second year in the 12 months starting Oct. 1, according to data from the NYSE Liffe exchange.
Investors held a net-long position, or a bet on higher prices, of 61,644 futures and options in the week ended Sept. 10, the Commitments of Traders report on the bourse’s website today showed. That’s the biggest bullish bet since the exchange started publishing trader holdings in 2011 and compares with a net-long position of 57,966 contracts a week earlier. The beans for December delivery rose 4.7 percent in the period.
Global cocoa supplies will be 129,000 metric tons smaller than demand in the 2013-14 season, Euan Mann, director at the London-based Complete Commodity Solutions Ltd., said at the European Cocoa Association Conference in Istanbul last week. That follows a shortage of 119,000 tons a year earlier. Chocolate sales will rise 6.2 percent to a record $117 billion next year, researcher Euromonitor International Ltd. in London estimates.
“The prospect of a further deficit year should support prices at the current level,” Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt, said in a Sept. 13 report. “Prices will have further upside potential especially if weather conditions in West Africa do not improve soon or if demand from the industrial countries surprises on the positive side.” West Africa accounts for about 70 percent of the global supplies, estimates the International Cocoa Organization.
Cocoa futures entered a bull market this month, rising today to 1,700 pounds ($2,712), the highest since Sept. 17 last year. Demand for the beans will jump 3 percent to 5 percent in 2013-14, Peter B. Johnson, chief executive officer of Fehrbellin, Germany-based cocoa processor Euromar Commodities GmbH, said at the ECA conference last week.
In robusta coffee, money managers cut bets on lower prices by 53 percent in the period, the data showed. The net-short position was 2,619 futures and options from 5,533 contracts a week earlier, exchange data showed. The beans used to make instant coffee and espresso slid 2.1 percent in the period.
In white, or refined, sugar, money managers’ reduced their net-long position by 32 percent. Investors were betting on higher prices by 4,566 futures and options as of Sept. 10, down from 6,682 contracts a week earlier, exchange data showed. The sweetener gained 2.5 percent in the period.
In feed wheat, money managers decreased their net-short position to 580 contracts from 625 lots a week earlier. The grain retreated 2.2 percent in the period.
--Editors: John Deane, Dan Weeks