Blog: Cocoa prices climb amidst weather concerns
Michelle Russell | 2 August 2012
Cocoa prices have hit a nine-month high amid concerns over poor global weather conditions and expectations that leading producers are running short.
The International Cocoa Organisation (ICCO) reported this week that cocoa had rallied 1.5% to GBP1,637 per tonne, up from GBP1,609.33 per tonne in July.
A spokesperson for ICCO told just-food that weather in West Africa has played a part in the increase in prices.
“It is certainly partly because of the weather and it really is a much more normal year this year than it was last year. Last year the weather was perfect and production significantly optimistic all over West Africa. This year it is much more of a normal background compounded with the weather being unfavourable which means deliveries in the ports in Ghana and Cote D'Ivoire are down, in some cases significantly on last year this time.”
The spokesperson said that despite economic problems in many of the countries that buy cocoa, there remains an “underlying strength” in the market that is moving up overall.
“A lot of the mature markets are very flat but even in the very flat markets there is some indication of solidity underneath.”
However, he added: “We are forecasting there is the potential for a global deficit in the next season in 2012/13 and we expect the current season which ends in September, there will be a deficit.”
Kona Haque, agricultural commodities analyst at Macquarie in London told just-food that the supply side risks are causing the market to rally.
She added: "There is a lot of uncertainty over what the main crop is going to look like."
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