Cooler Cocoa

Into the vortex of the New York Cocoa Exchange one day last week dropped a single bid for 60,000,000 Ib. of cocoa. Placed by Hershey Chocolate Corp. and amounting to nearly $6,000,000, the order brought to a sharp halt a selling swirl which had carried down the price of cocoa nearly 25% within a fortnight and forced the Exchange at one point to suspend trading. The Hershey bid, slightly under the market, was not filled, but coming from the world's largest cocoa buyer the gesture was enough.

Early last month the price of cocoa, having risen from 5-c- per Ib. last May, reached a nine-year high at between 12-c- and 13-c- per Ib. Basic and well-established reason for cocoa's hot market was the great increase in world consumption coupled with a shortage of production in West Africa. The precise extent of the shortage remained a matter of conjecture (TIME, Jan. 18). Traders to whom cocoa's market seemed too warm for comfort pondered the following circumstances: 1) tipsters and outside speculators were playing a larger part than usual in cocoa trading; 2) for weeks, every time the price of cocoa advanced a single point (.01-c- ), immediate selling orders for five or ten lots (one lot: 30,000 Ib.) had appeared from a mysterious source.

In the third week of January, when cocoa reached 13-c- per Ib. for the first time since 1928, nervous brokers advised their clients that the time for profit-taking had come. "With the chance that titanic forces are cannily at play in the bull-ring," said I. Witkin & Co.'s colorful market letter, "we prefer for the time being to be on the sidelines or in the grandstand. Possibly to help a huge and financially powerful long-interest, if our conjectures be correct, to unload upon a heterogeneous and unorganized investing public and manufacturers at large is to court an attack of speculative indigestion. . . ." Gently, then precipitously, cocoa prices fell.

Last week the trade buzzed with talk that a big manufacturer of chocolate coatings had skimmed the froth from the boiling cocoa pot. But the usual candidates for the role of "titanic forces" are "British interests"--an old bogey of the U. S. cocoa market. Because they are better informed than anyone else on the important West African crop, British traders have been known to take U. S. speculators for a fast ride. Last week cocoa men were passing around a story that United Africa Co. Ltd., greatest single trader and shipper on the British Gold Coast, was depressing the market so that it could buy its beans from the native tribesmen at lower prices.

By last week cocoa was being as widely tipped as ever. Said the current Witkin Bulletin briskly: "We have risked boring you. . . . The bears won a major battle, but are deep in enemy territory. Bull territory! Can they retreat with their skins intact? We think not!"

This file is automatically generated by a robot program, so reader's discretion is required.