18 December, 2009
Cocoa pricing hits 25-year high
The price of cocoa hit a 25-year high this month, with LIFFE March 2010 price, reaching £2,256/tonne. The International Cocoa Organisation (ICCO), said one of the main reasons for the price rise is three consecutive years of supply deficit. "For the current cocoa year (October-September) there has been uncertainty surrounding supply this is the main reason behind this price rise," said ICCO's senior statistician Laurent Pipitone. However, he noted that fears of another supply deficit are by no means substantiated.
"We've had a good start to the harvest," said Pipitone. But he added that the ICCO expects supply will tail off quite early in the period from January-March in the Ivory Coast and Ghana, which produce around 40% and 20% of the world's total cocoa, respectively. "Depending on the extent of the decline, the price could sustain this current high level or possibly even increase. We also expect demand to increase this year compared with last year."
According to the Financial Times, the price of cocoa is at its highest level since February 1985. It is feared the global market could face a supply deficit for the fourth year in a row, due to disease affecting yields in the world's largest cocoa producer, the Ivory Coast.
According to LIFFE, the price of cocoa has risen by more than £600 in the last 52 weeks up by around 37%.