The price of cocoa surged to its highest in 46 years on Wednesday’s Intercontinental Exchange in London.
The benchmark September contract for cocoa in London gained more than 2% on Wednesday to 2,590 pounds per metric ton.
This is the highest price since 1977 at 2,594 pounds.
The price of cocoa price also rose in New York as well. The September contract gained 2.7% to US$3,348 a metric ton, its highest in 7-1/2 years.
In other soft commodities, July raw sugar fell 0.46 cent, or 2%, at 22.57 cents per lb. Arabica coffee settled down 5 cents, or 3%, at US$1.6195 per lb, while robusta coffee fell US$99, or 3.6%, at US$2,616 a metric ton.
The price of cocoa surged to its highest in 46 years on Wednesday’s Intercontinental Exchange in London.
The gains in the price of cocoa come on the back of bad weather threatening production prospects for the main suppliers of the primary raw material in West Africa.
The prices are rising due to a tight market for cocoa beans, mainly produced in Cote d’Ivoire and Ghana. Arrivals of cocoa at Cote d’Ivoire ports for export are down nearly 5% this season.
The International Cocoa Organization (ICCO) widened its forecast for a global deficit in cocoa supply from 60,000 metric tons to 142,000 metric tons.
“It is the second consecutive season with a supply deficit,” said Leonardo Rosseti, a cocoa analyst at broker StoneX.
He said that the stocks-to-use ratio, an indicator of cocoa availability in the market, is expected to fall to 32.2%, the lowest since the 1984/85 season.
Meanwhile, above-average rains in Cote d’Ivoire are causing flooding in some cocoa fields, potentially hurting the main crop that starts in October.
Rosseti said that the rains are also hurting the drying process for cocoa beans that have already been collected.
Refinitiv Commodities Research said it expects moderate to high rainfall in the West African cocoa belt over the next 10 days.