The cocoa market will be in deficit this season and next, as rises in production fail to keep up with grindings.
World production will total 3.965 million tonnes in the current 2012/13 season versus grindings of 4.039 million tonnes, resulting in a deficit of 74,000 tonnes, The Public Ledger’s Cocoa S&D Poll of 43 industry experts showed.
In 2013/14, the deficit will increase to 178,000 tonnes with output at 4.036 million tonnes and grindings at 4.214 million tonnes.
The cocoa sector has seen a surplus for the last two seasons, which has helped prices on the terminal market cool from a 33-year high of over £2,700 ($4,080) a tonne reached in 2010. But a recovery in demand as Europe and the US emerge from recession will help keep futures – which have traded at around £1,400 to £1,600 over the last year – supported over the coming two seasons.
“I expect the global price of cocoa to increase compared to 2012/13 levels,” said a Ghana-based analyst. “Demand in Europe and the US is expected to increase due to an anticipated recovery of their economies.”
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