Cocoa hits highest price in 46 years
Prices are rising in reaction to a tight market for cocoa beans, which are mainly produced in Côte d’Ivoire and Ghana
Cocoa prices surged to their highest in 46 years on the Intercontinental Exchange in London on Wednesday as bad weather in West Africa threatened production prospects for the main suppliers of the primary raw material used to make chocolate.
The benchmark September contract for cocoa in London gained more than 2% on Wednesday to £2,590 per metric tonne. The session high was the highest price since 1977, at £2,594.
Prices are rising in reaction to a tight market for cocoa beans, which are mainly produced in Côte d’Ivoire and Ghana. Arrivals of cocoa at Côte d’Ivoire ports for export are down nearly 5% this season.
The International Cocoa Organization (ICCO) this month widened its forecast for a global deficit on cocoa supply from 60,000 metric tonnes previously to 142,000 metric tonnes.
“It is the second consecutive season with a supply deficit,” said Leonardo Rosseti, cocoa analyst at broker StoneX.
He said that the stocks-to-use ratio, an indicator of cocoa availability in the market, is expected to fall to 32.2%, the lowest since the 1984/85 season.
Meanwhile, above-average rains in Côte d’Ivoire are causing flooding in some cocoa fields, potentially hurting the main crop that starts in October.
Rosseti said that the rains are also hurting the drying process for cocoa beans that have already been collected.
Refinitiv Commodities Research said it expects moderate to high rainfall in the West African cocoa belt over the next ten days.
Cocoa prices rose in New York as well. The September contract gained 2.7% to US$3,348 a metric tonne, its highest in seven and a half years.
In other soft commodities, July raw sugar fell 0.46 cent, or 2%, at 22.57 cents per pound weight. Arabica coffee settled down 5 cents, or 3%, at US$1.6195 per pound, while robusta coffee fell US$99, or 3.6%, at US$2,616 per metric tonne.
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