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Cocoa rates struck brand-new peaks amid bleak production outlook

Rates for chocolatemaking basic material cocoa rose to fresh peaks on Thursday, building up gains above 10% this week alone, in the middle of reports of unfavorable production outlook for the world's second biggest grower.

London cocoa futures on ICE exchange surged past the psychological 5,000 pound barrier on Thursday while New York City cocoa breached the $6,000 mark, as supply tightness moved both markets to fresh record highs.

Cocoa rates in London closed 1.7% approximately 5,062 pounds per metric ton, after earlier striking a peak at 5,100 pounds. Futures in New york city ended little bit changed at $5,860, after reaching a record at $6,020/ heap.

The fresh cost peaks came amidst news that cocoa production from Ghana for the 2023/24 season is expected to be almost 40%. listed below a target of 820,000 metric loads, two sources from the. country's sector regulator COCOBOD said.

A drop of that magnitude would put cocoa output at around. 500,000 tons, considerably below the average forecast in a. poll released earlier this month of 620,000 lots.

Experts believe the high costs - London cocoa increased 70%. last year and got 50% up until now in 2024 - will start to effect. need as chocolate makers prepare to raise rates for their. products to cover greater basic material costs.

Altering formulas of products to use less cocoa was. A possibility for food business, they stated. chocolate huge Nestle on Thursday played down the relocation.

We have a long history in cocoa and cocoa flavoured. products ... playing with dishes and flavour profiles because. cocoa costs have actually gone up would be, in my opinion, a mistake,. stated Nestle President Mark Schneider.

It's just another product cost variation that we have to. handle, he stated.

In other soft commodities, raw sugar costs rose. 0.26% to 22.83 cents per pound after hitting more than a one-month. low of 22.11 cents.

Traders mentioned falling prices for refined sugar in China. as a bearish signal, since it cuts into refiners'. margins and can make imports non-economical.

London refined sugar fell 0.92% to $619.70 per heap.

Robusta coffee fell 2% to $3,113 a lot, entering into. the opposite direction of local rates in leading grower Vietnam. which rose this week on greater exporter need after the Lunar. New Year.

Arabica coffee fell 2.6% to $1.8315 per pound.

(source: Reuters)