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Barry Callebaut CEO Says Dislikes Speculators, Respects Armajaro

Source: Reuters
30/07/2010

July 30 - The chief executive of Barry Callebaut, the world's biggest chocolate maker, has a distaste for speculators who have driven up cocoa prices to their highest in more than three decades, but respects commodities firm Armajaro, the Financial Times reported on Friday.

"For the past five years or more there have been financial investors in the agricultural raw materials markets and I'm no fan of that," Juergen Steinemann was quoted as telling the paper. "Barry Callebaut is not a trader or a hedge fund."

While declaring that he had "a problem with the hedge (fund) guys" driving prices into unpredictability and creating volatility, Steinemann however told the paper that cocoa prices were set to stay at current high levels given the gap between supply and demand.

"At this moment, cocoa is a scarce material: demand has been rising, supply has been stable, so prices have gone up," Barry Callebaut's Steinemann was quoted as saying.

Liffe September cocoa prices LCCU0 roared to its strongest in more than three decades in July, with Armajaro holding the majority of graded stocks and a lack of fresh beans coming into the market ahead of the harvest in West Africa.

But Armajaro, whose 240,100-tonne delivery of cocoa on July's expiry was the largest in nearly 14 years and spurred fears of a supply crunch, is a well-respected firm, said Steinemann.

"As a player in the industry Anthony Ward really knows the market", said Steinemann, referring to Armajaro's co-founder.

Barry Callebaut was said to be the end user of about 100,000 tonnes of cocoa delivered on the London July cocoa contract, according European trade and industry sources. Callebaut had, however, declined to comment on this.

"If you consider the fundamentals, I'd tend to say prices won't fall. There's no fundamental reason why cocoa should become cheaper," Steinemann said without elaborating.

The International Cocoa Organization (ICCO) expects prices to stay high in 2011 due to continuing uncertainty over supply blamed on insufficient investment during civil strife in top producer Ivory Coast and concerns about supply from Indonesia.



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