(Bloomberg) -- Cocoa futures capped the biggest weekly gain in 19 years amid jitters on West African trade and supply, pacing a rally in soft commodities.Ghana, the world’s second-biggest producer, criticized cocoa sustainability programs and companies that it said are backtracking on a pledge to pay more for beans. In Ivory Coast, the top grower, President Alassane Ouattara and his main political rival last week began talks to ease tensions over last month’s disputed election. Violence left at least 85 people dead and hundreds injured, the government said.Cocoa prices rose to the highest in almost nine months to gain for the sixth straight session, the longest rally since August. Speculation that Ghana’s output may trail year-earlier levels amid adverse weather helped bolster futures.“There are several issues for West African producers that could result in near-term supply bottlenecks,” the Chicago-based Hightower Report said. Concern that buyers are balking at paying the living-income differential, or LID, for Ivorian and Ghana supplies “has added more near-term supply anxiety to the market,” the report said.Cocoa for March delivery climbed 1.8% to close at $2,712 a metric ton on ICE Futures U.S. in New York. The price reached $2,746, the highest for a most-active contract since Feb. 27. This week, the commodity surged 15%, the most since November 2001.Hershey Co. took the unusual step of buying beans through the exchange rather than the physical market, skewing some price differentials.“With Hershey somewhat circumventing the LID price and taking the New York futures market by surprise, it’s completely upended the structure,” said David Cutler, vice president of soft commodities at R.J. O’Brien Ltd. in London. Raw sugar, arabica coffee and cotton capped the third straight weekly gains.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
One of the world’s leading commodity traders, Louis-Dreyfus Company (LDC), has opened up to outside ownership for the first time in almost 170 years. The trader has sold a 45pc stake to ADQ, the Abu Dhabi state-owned holding company and also agreed a long-term supply agreement for the UAE. Owner Margarita Louis-Dreyfus, who also chairs LDC’s supervisory board, said the partnership marked a “milestone" in the firm's strategy. She has been seeking new investment after tightening her control in December 2018 when she bought out family members, borrowing about $1bn (£755m) from Credit Suisse to do so, pledged against her stake. Micheal Gelchie, LDC chief executive, said the firm and ADQ had a “shared ambition” to invest in innovation and technology that could “transform food and agricultural production”. LDC is one of the ABCD quartet of leading commodity traders, alongside Archer Daniels Midland, Bunge and Cargill. Founded as a grain trader in 1851 by Leopold Louis-Dreyfus, it produces, stores and ships about 80m tonnes of cotton, rice, sugar, grain and other agricultural products a year, with 2019 sales of $33.6bn and profit of $230m. Leopold’s great grandson, Robert Louis-Dreyfus, took over in 2006, three years before his death from leukaemia, when he put his wife Margarita in charge of the trust that held his 61pc stake. Commodities traders have been trying to diversify in recent years amid rising competition and trade wars. LDC has invested in partnerships with Leong Hup International, the poultry business based in Malaysia, and Luckin Coffee, the Chinese coffee chain. The terms of its deal with ADQ were not disclosed. LDC said at least $800m from the sale would be invested to support its long-term plans. H.E. Mohamed Hassan Alsuwaidi, chief executive of ADQ, said: "We share LDC’s vision for future growth of the business, and look forward to partnering with LDC’s existing shareholders and management team to capitalize on the sector’s emerging opportunities."
(Bloomberg) -- Supply Lines is a daily newsletter that tracks Covid-19’s impact on trade. Sign up here, and subscribe to our Covid-19 podcast for the latest news and analysis on the pandemic.Australia says Chinese customs officers are delaying imports of some premium shellfish products, in a sign its rock lobster industry could be the latest casualty of growing tensions between Canberra and Beijing.Some Australian lobster shipments have experienced customs clearance delays in the past few days due to increased import inspections in China, the Seafood Trade Advisory Group said in a statement. Most exporters have decided to halt shipments to China “until more is known about the new process.”Trade Minister Simon Birmingham called for all importers to be treated equally. “Chinese authorities should rule out the use of any such discriminatory actions,” he said in a statement Monday. Birmingham’s office declined to comment on a report in the South China Morning Post that Beijing is preparing to introduce bans on copper ore and concentrate, as well as sugar this week.A diplomatic spat intensified between China and Australia following Prime Minister Scott Morrison’s push for an independent inquiry into the origins of the Covid-19 outbreak. That has seen a string of Australian exports to its biggest trading partner subject to what Morrison’s government has described as “economic coercion.”Barley has been hit with tariffs and wine subjected to anti-subsidy and anti-dumping probes, while Beijing has discouraged tourists and students from visiting Australia. Morrison’s government last month said it was seeking clarification of reports that China has suspended purchases of Australian coal.Last month, some Chinese cotton mills were verbally told by Beijing government officials to stop buying the fiber from Australia, according to two people familiar with the situation, who asked not to be identified discussing a private matter.China accounted for 94% of Australian rock lobster exports worth A$752 million ($527 million) in 2018-19. Live lobsters are typically flown in on ice and need to be consumed within 72 hours of leaving Australia if they don’t go into holding tanks in China, according to Tom Cosentino, executive officer at Southern Rocklobster Ltd.It isn’t yet clear if the hold ups are related specifically to mounting trade scuffles between the two countries, Cosentino told the Australian Broadcasting CorpThe South China Morning Post cited multiple trade sources in China that it didn’t identify for the expected copper and sugar bans.Asked about the report, Chinese Foreign Ministry spokesman Wang Wenbin said China was “committed to developing friendly cooperative relations with other countries on the basis of mutual respect.”“We believe healthy and stable China-Australia relations serve the two peoples’ fundamental interests,” he said.Australia only exported about 1,066 tons of sugar to China in the nine months to September this year, accounting for only a fraction of its total 2.8 million tons of imports, according to data compiled by Bloomberg. Australia sends more than 50% of its copper ore and concentrate to China. For China, Australia accounts for less than 5% of its total imports of the products.The newspaper also said all timber exports from Australia’s Queensland state had been banned after customs officials found bark beetle in a shipment. The customs agency also ceased barley shipments from Australian grain exporter Emerald Grain after finding a grass-like weed, according to the report. The Melbourne-based company, owned by Japan’s Sumitomo Corp., didn’t immediately respond to a voicemail message seeking comment.Wang said customs officials had repeatedly found biohazards in Australian timber since the start of the year. He said imported seafood products were inspected and quarantined at the port of entry to guarantee food safety for Chinese consumers.Australia is the world’s most China-dependent developed economy, and has been seeking to reduce its reliance through a string of trade accords with other nations.(Updates with foreign ministry comment)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.