UPDATE: Ivory Coast Cocoa Exporters To Join Auction Process Friday
February 23 2012 - 4:52PM
Dow Jones News
An organization of cocoa processors and exporters in the Ivory
Coast confirmed that its members will participate Friday for the
first time in the country's auctions to forward sell its 2012-13
cocoa crop.
Cocoa exporters had refrained from placing bids in the auctions,
which started Jan. 31, citing a lack of clarity on the payment
process and calculations from Ivory Coast's coffee and cocoa
management board, which is running the sales.
Gepex, whose members include Nestle SA (NESN.VX), Cargill Inc.
and Olam International Ltd. (O32.SG), said in a letter Thursday
that it "will continue to engage with the government and the
Conseil Cafe Cacao to find mutually acceptable solutions
to...outstanding issues," which include financial and operational
concerns.
Archer Daniels Midland Co. (ADM) and Barry Callebaut AG
(BARN.EB) are also Gepex members.
Prices on the ICE Futures U.S. exchange in New York tumbled more
than 3% Thursday as traders got wind of the news and speculated
that the market would soon experience an influx of short positions,
as exporters who buy physical cocoa hedge their purchases in the
futures market.
The auction is part of the government's overhaul of the cocoa
sector to guarantee stable prices for farmers, in exchange for debt
relief from the International Monetary Fund. Ivory Coast is the
world's top producer of cocoa, the key ingredient of chocolate.
Last Friday was the first day that a major soft-commodity
trading house confirmed it had participated in the auctions.
U.K.-based commodity dealer Armajaro Trading said it took part Feb.
17 for the first time.
-By Alexandra Wexler, Dow Jones Newswires; 212-416-4883;
alexandra.wexler@dowjones.com.
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