Cocoa futures have backed-off its yearly highs made last month, but forecasts from industry experts agree new highs are expected by the end of the year due to a cocoa industry shake-up. Cocoa futures are down two points currently trading at $3,114 per ton at the Intercontinental Exchange.
Ecobank – a pan-African banking conglomerate – agriculture advisors claim cocoa prices are poised to break out above the current July yearly high (nearly $3,400/ton) before October because Africa’s top producer and exporter of cocoa beans are taking steps to corner a bigger share of the market. The West African cocoa bean growing season starts in two months and already they predict a continued supply shortage amid global demand allowing for higher producer prices.
“There is actually an expectation of higher fixed prices for cocoa beans and because of this, farmers are naturally holding back their product from the marketplace,” said Gerry Plotkin, a Senior Market Strategist for R.J. O’Brien in Chicago, regarding the fundamental assessment of the cocoa futures markets. Plotkin added, “A potential spike higher in cocoa (futures) can be expected under the conditions of recovering global demand and a shortage for next season.”
Cocoa futures trend is currently down at this time, but looking more like a retracement lower from the July high. More upside action will have to unfold before the overall cocoa futures uptrend resumes, but if you notice higher cocoa prices down the road…this is what’s going on where cocoa beans originate.
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