Cocoa rose to the highest price in more than two months on speculation that a global production shortfall will worsen as demand strengthens. Coffee also gained.
Output will trail consumption by 124,000 metric tons in the year ending Sept. 30, compared with a March estimate of 110,000 ton, Fortis Bank Nederland NV and VM Group said today in a report. The world’s cocoa-bean processors may grind almost 3.6 million tons in the period, up 3.3 percent.
“The wider deficit is largely the result of an across-the- board rise in grindings for all regions save Africa,” Fortis and VM said. They cited “very strong” evidence that demand from processors is rebounding from a drop of more than 6 percent last year.
Cocoa for July delivery rose $59, or 1.9 percent, to $3,198 a ton on ICE Futures U.S. in New York, after touching $3,211, the highest price for a most-active contract since Jan. 29. The 7 percent gain this week was the biggest since October.
In London, cocoa for May delivery gained 1.8 percent to 2,305 pounds ($3,543) a ton on the Liffe exchange, after touching 2,320 pounds, the highest level since Feb. 15.
“The market gains are being supported by reports of below- average rainfall for the first 20 days of April in Ivory Coast’s main growing regions,” Luis A. Rangel, an ICAP Futures trader in Jersey City, New Jersey, said yesterday in a report. “A recent dry spell in Nigeria was also becoming a concern.”
Ivory Coast is the world’s largest cocoa producer, followed by Ghana, Indonesia and Nigeria.
First-quarter cocoa grindings in North America rose 16 percent from a year earlier, the National Confectioners Association said on April 15. In Europe, usage jumped 8.1 percent, according to the European Cocoa Association.
The chocolate ingredient has jumped 30 percent from a year earlier in New York. London futures have climbed 25 percent in the past year, including a 5.7 percent gain this week, the biggest advance since Nov. 20.
Arabica-coffee futures for July delivery rose 0.5 cent, or 0.4 percent, to $1.3195 a pound on ICE, leaving the price up 0.9 percent for the week. The commodity has increased 12 percent in the past year.
On Liffe, robusta coffee for July delivery added $5, or 0.4 percent, to $1,336 a ton. The price has dropped 10 percent in the past 12 months.