GLOBAL: Cocoa price hits new highs
A mounting supply deficit and concerns about this year's harvest have pushed cocoa prices to new highs, fuelling fears over mid- to long-term availability.
Cocoa prices have risen sharply in recent months, with London futures closing at GBP2259.33 per tonne yesterday (15 December), while New York futures finished the day at US$3380.33 per tonne.
According to an expert at the International Cocoa Organisation, cocoa prices have been going up because three consecutive years of production deficit are constricting supply.
"For this season we expect another supply deficit - the fourth consecutive year," the spokesperson told just-food. "In the Cote d'Or - which produces around 37% of world cocoa - we suspect... that the harvest might be weakening."
Disease and poor weather conditions have meant that production has been unable to keep pace with strong increases in demand in recent years, prompted by growing chocolate demand, ICCO said.
"Last year had a decline in demand compared to the strong increases in previous years because of the economic conditions. But production went down even more," the spokesperson added.
The market has not witnessed a comparable shortfall in supply since the 1960s, when shortages were caused by three consecutive year's of supply deficit.
The increase in cocoa futures also reflects a "concern" over the ability of supply to keep up with demand in the mid- to long-term, the spokesperson revealed.
According to ICCO data, the Cote d'Or might have reached its production peak and while production in Ghana has grown it has declined in Indonesia.
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