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Commodities for Friday, May 10, 1985 : Cocoa Futures Prices Soar

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From Associated Press

Cocoa futures prices soared Friday on the Coffee, Sugar and Cocoa Exchange for the second straight day, primarily in response to steps taken by the exchange to force traders out of their contract positions. In the past two sessions, the price has advanced $179 a metric ton, more than 7% of its value.

On Friday, the exchange implemented steps to force traders to sell their contracts to assure the orderly liquidation of the contract for delivery in May, said Jim Bowe, senior vice president of the exchange. Traders, however, said the action was taken as the result of an unprecedented number of contracts being delivered against futures contracts.

Traders have already said they intend to deliver cocoa on 3,521 contracts, the highest ever, and analysts surmised that the exchange would be unable to physically inspect and grade sufficient cocoa for delivery.

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“That’s not true,” said Bowe, but he declined to say what made the extraordinary steps necessary, saying that a committee of the board of directors took the action after reviewing market-sensitive information it could not disclose.

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