Sept. 27, 2010 by Samuel Chong
Prices of cocoa have risen in the futures market on Monday, September 27, 2010, along with other soft commodities such as sugar, coffee, and cotton.
Previously, traders from world's top cocoa exporters suggested that the "Ivory Coast crop will be pretty good" and that many people expect a downward pressure of prices of cocoa. Indeed, cocoa prices on London's Liffe market LCCc2 have fallen over 20 percent since hitting a 32-year peak in July largely because of improved supply prospects. However, some people seem to have doubts on the outlook of the West African crop, pushing cocoa prices higher.
Meanwhile, domestic cocoa prices in Ivory Coast have fallen in the past week, signaling that there will be an abundant crop this fall.
On the other hand, Bloomberg has reported that cocoa production in
Uganda, Africa’s biggest producer of robusta coffee, may climb as much as
13 percent next season as new trees start bearing fruit, according to the
state-run Cocoa Development Project.
Long Term Price of Cocoa (Since 1981)
With the analysis above, it would be obvious to see the prices of cocoa go
down. However, today, the prices of cocoa jumped, rising to a
five-week high. This is under the circumstances that the price of cocoa
has dropped 14 percent this year on signs of increasing supply. Production
of cocoa may exceed demand by 75,000 tons, plus or minus 25,000 tons, in
the season that starts next month, according to the forecast of the
International Cocoa Organization.