(Bloomberg) -- Cocoa rebounded in New York, trimming this week's decline, with analysts seeing demand rising in an already constrained market.
The most-active contract rose as much as 3.3% to $9,770 a ton in New York. Prices are still set to edge lower on a weekly basis, following six straight periods of gains. Trading has become choppy recently, with a 60-day measure of volatility at its highest in about 15 years.
“A rebound in global equity markets may improve cocoa's near-term demand outlook, and that has helped to lift cocoa prices well above their early lows,” analysts at Hightower said in a report.
Prices in New York recently hit a record above $10,300 a ton, following a months-long surge. Pierre Andurand, a trader best known for specializing in the oil market, said this week they “could break $20,000 later this year” as his hedge fund bets on a surge.
Separately, arabica coffee headed for the biggest weekly gain since December as supply headwinds for the upcoming season emerge. Prices could rally in the short term and have a higher price support in the medium term as roasters are encouraged to switch to premium beans, Citi Research analysts said in a Thursday note.
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