Global Cocoa Deficit Deeper Than Expected, US Stockpiles Hit 2009 Lows
Following a massive price surge in cocoa prices in New York earlier this year, where prices topped nearly $12,000 per ton before bottoming out in the low $7,000s and resulting in what technical analysts say is a triangle pattern, prices are expected to stay rangebound as compression indicates a major move nears. Bloomberg cites new data from the International Cocoa Organization that says demand will exceed production by 462,000 metric tons. That’s about 5.2% more than the ICCO’s May forecast of a 439,000-ton deficit. This is a much larger shortage than the initial outlook published in February. In the Friday report, ICCO wrote that global cocoa supplies remain depressed due to “adverse weather conditions, aged trees, pests and diseases that affected production in major cocoa areas during the season under review.” Global cocoa production this season is 4.33 million tons, 2.9% below ICCO’s previous forecast. Grinding estimates are expected to be 2.1% lower, at 4.75 million tons. Bloomberg noted, “New York futures are up around 80% this year as poor harvests in West Africa curbed supplies, though prices …
