Sorry Valentine, I can't afford it
NEW YORK (Reuters) - Want a cheap date? Try flowers, because the sweet and shiny stuff of romance is getting expensive.
Platinum prices set a new record above $2,000 an ounce on Thursday. Gold costs more than $900 an ounce, Cocoa is above $2,500 a metric ton, and if you want to bake your dearest a cake, flour wheat is at a record -- a recipe for the most expensive Valentine's Day ever.
Call it a celebration of love -- of fund managers for commodities. Betting that worldwide shortages of many raw materials will persist, money managers and speculators are piling into commodities after pulling money out of stock markets, meaning higher prices for everything including snacks, earrings, bread and gasoline.
"We have higher cocoa, higher coffee, higher corn, so food prices are very likely to be part of the squeeze that's been put on consumers," said Bill O'Neill, managing partner of LOGIC Advisors in Upper Saddle River, New Jersey.
Of course, it can take time for high commodity prices to be passed along to the consumer. Chocolate makers bought their cocoa for Valentine's Day months ago.
Still, platinum, popular in recent years as an alternative to gold and other jewelry, soared to $2,030.60 at the New York Mercantile exchange, its 11th record high in 12 days.
April futures, settled up $22.20 at $2,005.90 an ounce on the back of news on Wednesday that a power crisis in top producer South Africa that has curtailed mine production could persist for years.
Spot platinum hit a record of $2,205 an ounce and closed at $1,997.00/7.00 in New York.
April gold at the COMEX division of the NYMEX rose 60 cents to $910.80 an ounce. Spot gold closed in New York at $907.10/90, up from $906.70/7.50 on Wednesday.
In electronic ICE Futures, the U.S. May cocoa contract was up $57 at $2,545 a metric ton in late trade, having peaked at $2,560, a level last seen in June 1984.
"I have these chocolates stocked by my desk," said Ralph Preston at Heritage West Financial, who thinks his favorite candy will soon cost him more.
A year ago, cocoa was trading at around $1,800 a metric ton.
Preston expects the market to hit $2,600 by next week. "The funds are coming in and buying at full strength," he said.
The run-up in cocoa comes amid bad weather in top growing nation Ivory Coast, which dashed farmers' hopes for a bumper season and reduced exporters' overall harvest forecasts.
The March raw sugar contract hit an 18-month high and was quoted late 0.45 cent higher at 13.20 cents per lb. That is still well below sugar's highs near 20 cents two years ago.
Prices of protein rich U.S. spring wheat are so high on the Minneapolis Grain Exchange that German exporters are sending high quality German wheat to the United States, despite high freight and delivery costs.
There is a global shortage of the best bread-making wheat. Minneapolis wheat has led the other varieties traded in Chicago and Kansas City and it rose its daily 90-cent limit to end at a record $18.53 a bushel.
At the Chicago Board of Trade, March soft red winter wheat went up 40-1/2 cents to $10.32 a bushel.
Driving? NYMEX March reformulated gasoline rose 8.62 cents to $2.4761 a gallon. Crude rose $2.19 to 95.46 a gallon.
What about diamonds? Well, Varda Shine, managing director of DeBeers Diamond Trading Co, recently told Reuters, "The very rare diamonds, whether they are blues or pinks or big white stones, are going to continue appreciating.
"Those that are very rare are like pieces of art. The number of billionaires is growing."
(Additional reporting by Veronica Brown and David Brough in London; Editing by Christian Wiessner)
