MONTHLY REVIEW OF THE COCOA MARKET SITUATION

NOVEMBER 2010

The current review of the cocoa market situation reports on price movements on the international
markets during the month of November 2010. Chart I shows graphically the evolution of prices on the London
(NYSE Liffe Futures and Options) and New York (ICE Futures US) markets in November. Chart II shows the
evolution of the ICCO daily price, quoted in US dollars and in SDRs, from September to November 2010.
Chart III depicts the change in the ICCO daily price Index, the Dow Jones-UBS Commodity Index and the
US Dollar Index. Chart IV presents recent changes in daily price volatility of cocoa compared to coffee.

Chart I: Cocoa bean prices on the London (NYSE Chart II: Chart II: ICCO daily prices
Liffe) and New York (ICE) futures markets September – November 2010
November 2010
2000 3100
2970 2000

2940 1965

1940 3000

2910 1930
SD Rs per tonne

U S$ per tonne
US$ per tonne

2880 1895
£ per tonne

1880 2900

2850 1860

1820 2800
2820 1825

2790 1790
1760 2700
0

0
0

10

10

10
-1

-1

-1

-1

-1

-1
ct-

ct-

ct-

2760 1755
ep

ep

ep

ov

ov

ov
-O

-O

-O
-S

-S

-S

-N

-N

-N
01

13

23

05

15

27

08

18

30
0

0
-1

-1

-1

-1

-1

-1

-1

-1
ov

ov

ov

ov

ov

ov

ov

ov
-N

-N

-N

-N

-N

-N

-N

-N

US$ per tonne

01

04

09

12

17

22

25

30

New York (at London close) (US$) SDRs per tonne

London (close) (£) 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.

In November, the ICCO daily price averaged US$2,910 per tonne, down by US$17 compared to the average
price recorded in the previous month (US$2,927), and ranged between US$2,851 and US$3,035 per tonne.
Cocoa futures moved in a downward trend at the beginning of November, as the elections in Côte d’Ivoire
loomed without any major disruptions despite the political uncertainty. This period of price decline was also
associated with origin hedging in addition to speculative and technical selling. The London market recorded its
lowest level of £1,811 per tonne since the start of 2010/2011 cocoa season while, in New York, cocoa futures attained
a low of US$2,768 per tonne during the month.
In the second week of the month, cocoa futures changed direction, increasing by five per cent to £1,896 in
London and by four per cent to US$2,891 in New York. As for most commodities, cocoa benefited from reported
positive developments in the European banking crises and favourable demand prospects from China. This recovery
xx
 Chart III: ICCO daily price Index, was however short-lived and the markets resumed their
Dow Jones-UBS commodity index downward trend following reports of strong arrivals to
and U.S. Dollar Index ports in West Africa.
108 As shown in Chart III, by the third week of
November, cocoa prices surged while the price for most
106 ICCO daily price
other commodities declined. The potential for supply
disruptions arising from the election run-off in
Côte d’Ivoire supported the cocoa market. Prices attained
104
their highest level for the month, reaching £1,946 and
US$2,959 per tonne in London and New York
Index

US$ Index
102 respectively. Thereafter cocoa futures moved mostly
downwards and fell to £1,861 per tonne in London and
100 US$2,780 per tonne in New York at the end of the month.

98 Price volatility
DJ-UBS Index

96
The relatively high level of uncertainty on the
extent of the impact of the political situation in
0

-1 0

0
v-1

v-1

v-1

v-1

v-1

v-1

v-1

Côte d’Ivoire led to a rise in cocoa price volatility in

ov
-No

-No

-No

-No

-No

-No

-No

November, as shown in Chart IV.

-N
01

04

09

12

17

22

25

30

Notes: Supply and demand situation

The US Dollar Index is a measure of the value of the United States dollar
relative to a basket of six major foreign currencies. The Dow Jones
Commodity-UBS Index tracks price movements across various According to news agency data, cocoa arrivals at
commodities, including energy, precious metals, industrial metals, grains, ports in Côte d’Ivoire reached around 412,000 tonnes
livestock, softs (cocoa being excluded) and agriculture. during the first two months of the current season. This
Both indexes are rebased.
represented an increase of about eight per cent compared
Chart IV: Cocoa and coffee daily price volatility with 383,000 tonnes reported during the same period of the
(values expressed in annual terms) previous season. In Ghana, cumulative cocoa purchases
55% by the Cocobod from the beginning of the season to the
50% end of the month reached 376,000 tonnes. This was about
45% 41% higher than the same period of the last season.
40%
35% Cocoa butter ratios, an indicator of demand, have
Cocoa
30% followed a downward trend since the end of September,
25% reaching a level of below 1.5 at the end of November. On
20% the other hand, cocoa powder trade has been very active.
15% Some analysts are of the view that there has been an
10% increase in the use of vegetable fat for chocolate and this
Coffee
5% has weighed down cocoa butter prices.
0%
J u 10

Au 0
Fe 1 0

Ju 0
D 09
Ja 9

M 10
Ap 10

O 10

0
N 09

N 10
Se 10
M 10

l-1
-0

-1
1
-

p-
-
n-

n-
b-

g-
-

-
r-
ov
ec

ov
ay
ar
ct

ct
O

ICCO Daily price (cocoa)

ICO Composite indicator price (coffee)

International Cocoa Organization

Commonwealth House - 1-19 New Oxford Street - London WC1A 1NU - United Kingdom
Tel.: +44 (0)20 7400 5050 – Fax: +44 (0)20 7421 5500 – http://www.icco.org