Futures contracts cocoa climbed to their highest level in nearly six months on growing concerns about declining output in West Africa, with global supplies already tight, according to a Bloomberg report, adding to price pressures chocolate.
The most active contract rose as much as 2.4 percent to $10,092 a tonne in New York, the highest level since June 14. Futures are headed for a weekly jump of about 6%, the sixth straight week of gains.
While cocoa bean arrivals at the ports of top producer Ivory Coast are today above last year’s pace, there are fears of a mid-harvest harvest. Drier conditions in West Africa could hurt the outlook for this cycle starting in April, according to the Maxar weather service.
The problem is compounded as we move towards Christmas when demand for chocolate soars. So the prospect of a supply-demand deficit in cocoa beans will mean much higher prices to come, according to the Financial Times.
It is likely that many chocolate producers who, betting on a steady fall in prices, emptied their stocks of cocoa in the past, will now be forced to make up for it by buying at much higher prices.