cocoa prices – Page 5 – Michael Niemann

January 21, 2009

ICCO Predicts Cocoa Shortfall

The executive director of the International Cocoa Organization (ICCO) indicated on Monday that the 2008/09 cocoa season will yield less cocoa than previously thought. Despite a predicted decline in demand as a result of the global economic crisis, Jan Vingerhoets told Reuters that he expects a shortfall of about 45,000 tonnes.

It seems that the economic mess has not yet halted demand for chocolate. Fourth quarter grindings in Europe and the U.S. were up compared to last year albeit by small amounts, 0.1 percent and 1.85 percent respectively.

Continue reading “ICCO Predicts Cocoa Shortfall”

January 12, 2009

Speculation and Commodity Prices

Last night, CBS’s Sixty Minutes broadcast an investigation into the wild swings of the oil prices last year rising to $147/barrel and then falling to less than $40/barrel in a short period of time. The report offers some prime evidence that investment and hedge funds were the primary movers behind these price increases and that some investment banks may actually have profited from these movements as they invested in commodities while owning oil facilities.

Much of what happened in the oil sector can also be applied to the cocoa sector. Just substitute cocoa for oil and the same logic held true for cocoa: a sharp increase in price without evidence of a shortage of beans and a subsequent decrease without any news of a large oversupply.

The report concluded with a call for more oversight and regulation, call I can only second for the cocoa markets.

December 24, 2008

Cocoa Prices Hit 23-Year High in London

Several news sources reported that cocoa futures hit a 23-year high in London yesterday with a price of £1,824.33/ton. However, the U.S. price stayed more moderate with a price of $2,666/ton, quite a bit below the July high above $3,000/ton. The reason for this discrepancy lies in the appreciation of the dollar since July.

Continue reading “Cocoa Prices Hit 23-Year High in London”

December 18, 2008

Cocoa Deliveries Continue to Lag in West Africa

Global cocoa prices seem to be on an upswing after riding the speculative roller coaster up and down earlier this year. The New York closed for March cocoa reached $2,610/ton, a new high after falling as low as $2,080 in November. This time around, though, that increase seems to have some real basis on the ground. There is less cocoa to be had.

Continue reading “Cocoa Deliveries Continue to Lag in West Africa”

November 25, 2008

More News from the Côte d’Ivoire

The cocoa embargo initiated by Ivoirian farmers (see my earlier post) has come to an end. The action itself probably did not push traders and exporters to pay farmers the suggested minimum farm gate price, but the action has certainly slowed down the delivery of cocoa to Ivoirian ports.

Continue reading “More News from the Côte d’Ivoire”