December 11, 2014
Fears that the recent Ebola outbreak would affect Ghana and Ivory Coast, the two countries responsible for the bulk of the world’s cocoa, have driven processors to stockpile supplies causing a run on prices. However, high cocoa prices may not be sustainable moving forward as concerns over the spread of the Ebola outbreak are easing and processors are using built up stocks causing a drag on demand. In addition, North American grind volumes increased 4.6% year on year for the July through September quarter, driven by advanced buy-ins by manufacturers prior to expected price hikes. Prices in London are currently 10% lower than their September high and prices in New York are 13% lower, and given the lack of production concerns and hangover from stockpiling by processors, prices could fall even further.
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