cocoa futures news

cocoa futures news

February 21st, 2017

Cocoa futures prices plunged to eight-and- a-half year lows last week, on ideas of a substantial glut in the market, thanks to a huge crop in Cote D’Ivoire, the world’s top producer.

But with much of the crop reported to be stuck in lorries, or rotting on the trees, and with farmer incomes squeezed by low prices and slow sales, how long can this market surplus last?

And if cocoa processors step in to buy and the current rock-bottom price, after depleting their butter and powder stocks during a low period of low grinding, will they find the volumes and the quality they expect?

Cocoa Futures: Government programme backfires

Farmers in Cote D’Ivoire are struggling to find buyers for their beans, after a large number of local exporters reneged on contracts.

“What appears to be the root cause is that an attempt by the government to try to improve the position of small exporters has backfired very badly,” explains Edward George, head of commodity research at the pan-African bank Ecobank.

The Ivorian Coffee and Cocoa Council (CCC) this season increased the share of contracts they gave to small local exporters, allowing them to buy beans locally and sell them onto the international market.

“The CCC wanted to give the smaller exporters a bigger piece of the pie,” Mr George says.

Continue reading »

cocoa options

cocoa options

February 7th, 2017

Cocoa prices should regain some ground by the end of 2017 following a prolonged slide fueled by expectations for a global surplus in the current 2016/17 season, a Reuters poll of nine traders and analysts showed on Tuesday.

The survey’s median forecast for New York cocoa futures prices at the end of the year was $2,400 a tonne, up 17 percent from Monday’s close.

London cocoa futures were also seen rising, with a median forecast of 1,880 pounds a tonne for the end of 2017, up 12 percent from Monday’s close.

Supportive factors included a potential pick-up in demand later this year, the prospect of lower farmer prices helping to curb production and concerns there could be further unrest in top producer Ivory Coast.

“We expect some pick up in demand towards the middle of the calendar year due to lower prices,” said Carlos Mera, senior commodity analyst at Rabobank.

New York cocoa futures fell by 33 percent in 2016, the biggest annual loss since 1999, and have fallen a further 4 percent so far this year.

The decline was driven partly by an anticipated swing from a global deficit in the 2015/16 season (October/September) to an expected surplus in 2016/17.

Continue reading »