Why 2015's Best Commodity Could Turn Into This Year's Nightmare
- Cocoa supply poised to surge as high prices encourage farmers
- Rabobank says global surplus will send cocoa plunging in 2016
A workers uses his hands to mix cocoa beans at a farm near Ilheus, Brazil, on May 28, 2015.
Photographer: Paulo Fridman/BloombergThis article is for subscribers only.
Last year’s best-performing commodity is poised to become the market’s worst nightmare.
After the longest rally in London cocoa futures since at least 1989, farmers from Ivory Coast to Peru are preparing to revive supplies in the 2016-17 season that starts in October, creating a surplus that Rabobank International says will be the largest in six years. With demand slowing, the bank is most bearish about prices for the chocolate ingredient this year among the dozen agricultural commodities it tracks.