By Joe Hoppe


Cocoa future prices hit a fresh high as demand stayed strong despite intense supply shortages, according to a report from the European Cocoa Association.

Futures rose 6.6% to $10,728 a ton, after hitting $10,863 earlier in the session. They have more than doubled since the start of the year.

The number of grindings, or beans processed to be turned into chocolate, fell just 2.2% in Europe in the first quarter, according to the ECA. 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 the bean trade and 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 two governments have 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 when compared with 2022-23.


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


(END) Dow Jones Newswires

04-18-24 1100ET