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Let up in sugar and cocoa commodity commotion unlikely, analyst

By Jane Byrne , 03-Mar-2011

Related topics: Ingredients, Commodities, Cocoa & Sugar

As the market and industry weighs the impact of turmoil in Ivory Coast on cocoa supply and tightness in sugar trade continues, we talk to Rabobank analyst Keith Flury to see whether there will be any let up in commodity commotion in 2011.

Flury stressed the importance of market fundamentals and political events rather than hedge fund speculative engagement as a driver behind the volatility of the two ingredients.

He also said that end user manufacturers may not have as much cover as they orginially thought when it comes to cocoa stocks and are now getting nervous about inventories.

According to Flury, EU intervention measures on sugar may ease supply pressure in the bloc in the short term but volatility in the commodity is set to continue due to global market conditions.