The cocoa forward contract traded in London recently fell to a two and half year low of £1,780/ton. At US$2,240/ton, cocoa in New York was at its lowest price in three and a half years.
Commerzbank Research says more and more observers are expecting to see oversupply in the 2016/17 crop year. Commodities broker JSG Commodities envisages a global supply surplus of 172,000 tons, and says high prices in the past two years have boosted cocoa growing in West Africa and Latin America.
The crop in Côte d’Ivoire looks set to grow to 1.8 million tons, slightly exceeding the previous record from the 2014/15 crop year. JSG estimates global supply at 4.405 million tons and worldwide grinding at 4.189 million tons.