According to an item in Marketwatch, Fortis Bank reports that world cocoa grindings will decline by 3 percent in 2009. Cocoa grindings, as I explained in another post, are a good indicator of future cocoa demand. Coupled with reports that cocoa deliveries in West Africa are improving, that news has already send cocoa prices lower on the NY futures market.
Despite the decline in demand for cocoa, Fortis nevertheless predicts a shortfall of 45,000 tons of cocoa, the same amount predicted by the ICCO over a month ago. In other words, there are sufficient stocks to cover the shortfall.
A more interesting tidbit was the reference to the collapse of the price premium commanded by top quality cocoa. Fortis takes this to signal a decline in the demand for premium chocolate.
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