Cocoa extends gains as supply shortage keeps price near record
Cocoa gained in New York, with prices heading back toward a record high amid lingering fears about global shortages.
Futures climbed as much as 4% to head for a fourth straight increase. Prices have surged this year — recently exceeding $10,000 a ton — as poor West African harvests put the world on course for another annual deficit, threatening to further raise chocolate prices.
“West African near-term supply remains very tight at the start of the mid-crop harvest, and that has provided underlying support to the cocoa market,” the Hightower Report said.
The crunch is making it harder and more expensive for the world’s chocolate makers to secure beans, with the parent of Godiva signaling it will raise prices due to soaring costs. Still, Barry Callebaut AG, which supplies some of the biggest consumer chocolate brands, on Wednesday indicated that it’s managing to weather the crisis and is so far “well covered” for supplies.
During a Wednesday conference call, Barry Callebaut’s Chief Executive Officer Peter Feld said the company is being cautious amid the uncertainty in cocoa markets. “We believe that what goes up fast, comes down fast at one point in time. And we’re preparing for that,” he said.
Soft commodity prices
- Cocoa futures climbed 2.3% to $9,811 a ton as of 11:26 a.m. in New York
- London cocoa gained 2.6%
- Raw sugar edged lower while arabica coffee was little changed.
