By Joe Hoppe


Cocoa future prices broke the $11,000 mark for the first time, following a report from the European Cocoa Association which showed resilient European demand despite intense supply shortages.

Futures rose 10% to $11,069, having reached $11,104 earlier in the session. They have more than doubled in the last three months.

Volumes of grindings, or beans processed to be turned into chocolate, fell just 2.2% in Europe in the first quarter, according to the ECA, showing resilient demand despite rising prices. Grind statistics are used as a proxy for cocoa demand, with Europe one of the world's largest markets for cocoa.

The ECA is a trade association grouping major companies involved in cocoa trade, processing, warehousing and other logistical activities in Europe.

In West Africa, where about 70% of global cocoa is produced, powerhouses Ivory Coast and Ghana are facing catastrophic harvests on adverse weather conditions and disease, prompting the rally.

The countries' governments set out plans to allow farmers to charge more for their crop in a bid to boost production, but this is unlikely to improve the situation in the short-term.

The International Cocoa Organization--a global body of cocoa producing and consuming countries--said in its latest monthly report that it expects the global supply deficit to widen to 374,000 metric tons in the 2023-24 season, from 74,000 tons last season.

Global cocoa supply is anticipated to decline by almost 11% to 4.449 million tons compared with 2022-23.


Write to Joe Hoppe at joseph.hoppe@wsj.com


(END) Dow Jones Newswires

04-18-24 1225ET