The London-based International Cocoa Organization (ICCO) forecasted a wider global cocoa deficit of 193,000 tons in 2008/09. Accordingly, cocoa for delivery in May gained 45 pounds, or 2.6%, to 1,758 pounds ($2,472) a ton on the Liffe exchange.
Cocoa prices jumped 12% in January on the heels of last year’s 71% surge, with the market mainly factoring in supply destruction. However, according to one Barclays analyst quoted by Bloomberg, “demand-side fundamentals do not look terribly positive [either].” That sentiment was reiterated by a report issued yesterday by Brussels-based bank Fortis, which disclosed its own prediction that the cocoa supply will narrow to 45,000 tons from 120,000 tons a year earlier. The industry group also projects a 2.1% drop in consumption this season.