COTE D'IVOIRE COCOA SALES PUT DOWNWARD PRESSURE ON PRICES

COTE D'IVOIRE COCOA SALES PUT DOWNWARD PRESSURE ON PRICES

The fate of 50,000 to 100,000 tons of Ivorian cocoa could push world prices to new lows this week.

Cote d'Ivoire has been offering cocoa in the physical market, traders said. Cote d'Ivoire, the world's leading cocoa producer, was believed to have sold up to 50,000 tons to a manufacturer last week, and further sales were expected.Analysts said that traders late Friday bid prices down in anticipation of more sales.

"The market has been depressed because of recent sales in the physical markets, but lately the uncertainty about Ivory Coast sales has made its mark on lower prices," said Steven W. Platt, a senior futures market analyst for Dean Witter Reynolds Inc. in Chicago.

Mr. Platt said he was not sure about last week's reports of 30,000 to 50,000 tons of Ivorian cocoa sold on the world market but believed Cote d'Ivoire did "some good business."

Analysts at General Cocoa Co. in New York said the markets were anticipating the Cote d'Ivoire's momentary entry into the markets as cocoa sellers. Currently, most of the cocoa available for sale from the West African country is from its midyear crop. Most of the country's main crop is expected to be harvested later in the year.

General Cocoa analysts also suggested that drier-than-normal weather in West Africa is creating some concern about production.

Many analysts foresee a smaller Cote d'Ivoire crop for the 1991-92 year of 625,000 tons, a reduction of 100,000 tons from the previous crop.

The smaller crop is "catching people off guard," Mr. Platt said. "The crop could be lower, depending on weather conditions later this year."

Meanwhile, rumors persist that Cote d'Ivoire trade deals with the Russians and the French last year "were on the rocks," Mr. Platt said.

That was one of the reasons the Cote d'Ivoire may be selling cocoa now, another analyst said.

Meanwhile, major cocoa buyers remained on the sidelines last week, reluctant to increase their buying activity despite the lower prices.

Favorable weather conditions for Brazilian cocoa, another world-class crop, also pressured cocoa prices in recent weeks, analysts said. However, analysts said the Brazilian crop remains vulnerable to weather conditions and crop disease, especially cocoa pod rot.

Analysts said U.S. cocoa manufacturing was down on sluggish consumption. Consumer demand in Europe was similarly subdued as the European cocoa industry also appeared to be waiting for Cote d'Ivoire sales, analysts noted.

Cocoa futures on Friday were down $25 a ton, the biggest loss of the week. The May 1992 futures contract on the New York Coffee, Sugar & Cocoa Exchange traded at $1,013.