Cocoa futures slip on investor sell-off.(Commodity Report)

COCOA FUTURES EXPERIENCED mixed fortunes of late, largely on the back of funds and speculator activity. Recent weeks saw futures prices driven up to multi-year highs as funds and speculators piled into cocoa and certain other commodities, seeing them as better bets than stocks. The benchmark second position contract (May) on the London International Financial Futures Exchange (LIFFE) saw first a five-year peak of UK[pounds sterling]1,452 a tonne recorded on 6 March, and just over a week later on 14 March, a five-and-a-half year high of UK[pounds sterling]1,567 a tonne.

Yet, just three days later funds and speculators took fright as part of a wider commodities sell-off linked to the deepening global financial crisis. As a result, cocoa futures prices tumbled in the wake of the sell-off with the May contract shedding UK[pounds sterling]112 a tonne to end the day's trading at UK[pounds sterling]1,455 on 17 March.

Traders reported they saw no significant market impact from a dockers' strike in leading cocoa producer Cote d'Ivoire. A dock workers' strike in an attempt to stop cocoa and coffee exports from leaving the country entered its second week on 17 March. The stoppage was being followed only partially at the western port of San Pedro, according to Cote d'Ivoire exporters.

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