Next year Cocoa Prices to Rise Again

According to specialist the global cocoa market is set to remain in deficit for at least two more seasons and the average price should rise in 2009.

With
supply-side risks remaining high, prices will be volatile, average
126.5 cents per lb in 2008 ($2,790 a tonne) and 137 cents per lb
($2,865 a tonne) in 2009.
Cocoa futures have risen sharply this
year, setting a 28-year peak on ICE on July 1. The advanced has been
driven partly by crop concerns in both Ivory Coast and Indonesia.
The
benchmark September contract on ICE closed at $2,858 a tonne on
Thursday, up 40 percent from the front month price at the end of
2007.
Rcent reports indicated the 2008/09 crop, particular in top
producer Ivory Coast, had got off to a poor start while the
Indonesian Cocoa Association in June said an outbreak of fungal
disease had affected 60 percent of the cocoa plantations in Sulawesi,
the main growing region.
Global consumption of cocoa had risen at
4.8 percent per annum over the past 5 years, compared with just 1.4
percent growth in the previous 5 years, stimulated partly by rising
living standards.
Strong growth in emerging Asia and eastern
Europe should offset any softening in mature markets and growth
should accelerate from 2009/2010 to 3.3 percent.