July 18, 2010 / 2:35 PM / 10 years ago

Commodities house Armajaro behind big cocoa bet: paper

Cocoa bags in a warehouse in Gonate, western Ivory Coast, September 22, 2008. REUTERS/Luc Gnago

LONDON (Reuters) - Commodities firm Armajaro is behind a 600 million pound bet placed on the cocoa market, the Sunday Times newspaper said.

Armajaro, co-founded by Anthony Ward, took delivery of 240,100 tonnes of cocoa beans last week, betting that a steep rise in prices is set to continue, the newspaper said, without citing sources.

At Friday’s closing price, the investment was worth just under 600 million pounds, it added.

Ward declined to comment when contacted by Reuters.

The 240,100 tonne delivery was the largest in nearly 14 years and represented almost all the physical stocks registered with the Liffe exchange, fuelling fears of a supply crunch for the September contract.

It follows weeks when open interest or outstanding positions for the July contract was very high, prompting some market participants to complain to Liffe about the extent of speculation in the market and the lack of transparency on who was doing what.

Cocoa prices hit 32-year highs last week. The July and September futures contracts are always vulnerable to a shortage of fresh cocoa supplies prior to the harvest in the largest producing region, West Africa, in September.

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