Cocoa prices rise on dry weather

LONDON: Cocoa rose in New York on speculation dry weather will erode crops in West Africa, the world's biggest growing region for the chocolate ingredient.

"Spotty showers" this week from southern Ivory Coast to Nigeria and coastal Cameroon are unlikely to bring more than 0.15 inch (0.4 centimeter) of rain daily through December 7, according to AccuWeather.

Cocoa demand may exceed production by 50,000 tonne in the 2012-13 season, the International Cocoa Organisation says.

Cocoa "benefited from growing concern about West African crops," INTL FCStone analyst Edward Meir said on Wednesday. "Hot and dry weather is delaying harvesting in both Ivory Coast and Ghana, and to a lesser extent in Nigeria. In addition, the market's expected surplus for this year is now expected to turn into a minor shortfall."

Cocoa for delivery in March added 0.6% to $2,459 a tonne at 7:43 a.m. on ICE Futures US in New York, climbing for a fifth session in six. Prices are up 17% this year. Cocoa for the same delivery month rose 0.8% to 1,561 pounds ($2,513) a tonne on NYSE Liffe.

Ivory Coast and neighboring Ghana are the world's two biggest cocoa growers. Nigeria ranks fourth.

Stockpiles of cocoa in warehouses monitored by ICE fell 0.8% on Tuesday, after jumping 2.1% on December 3, the biggest gain since March, according to exchange data on Bloomberg. Inventories slid 31% in the past eight months.

Raw sugar for delivery in March advanced 0.3% to 19.49 cents a pound in New York. White, or refined, sugar for the same delivery month rose 0.1% to $518.60 a tonne in London.