Cocoa prices at over 20-year high
source: http://uk.reuters.com/article/gc08/idUKL1837161720080618
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LONDON/NEW YORK (Reuters) - Cocoa prices surged to their highest level in over 20 years on Wednesday, adding extra pressure to global food prices, after reports of a possible supply squeeze in the world's top grower, Ivory Coast.
A report by independent analyst Hans Kilian, seen as bullish on Ivorian supplies, was the initial trigger for a fund and investor-driven surge in U.S. futures to a 28-year high of $3,122 a metric ton.
In London, benchmark second-month cocoa futures hit a 22-year peak of 1,682 pounds ($3,277) a metric ton, before closing at 1,658 pounds, up 33 in brisk volume of 5,641 lots.
Analysts said cocoa prices could rise further due to robust global demand and a tight supply outlook.
"We haven't been at these nose-bleed prices in years," said Ralph Preston, futures analyst with HeritageWestFutures.com in San Diego. "Especially with that fundamental news coming out, that's going to really light a fire under this."
Jack Scoville, a vice-president for brokers the Price Group in Chicago, said the next key price target for second-month U.S. futures would be $3,140 a metric ton.
Benchmark ICE September futures settled up $72, or 2.4 percent, at $3,098 per metric ton, in dealings from $3,050 to $3,122, a high for the second-month dating back to February 1980.
Analyst Kilian, who is highly regarded in the cocoa market, has frequently moved cocoa futures prices with his West Africa crop reports, which he distributes to private clients only.
A report by independent analyst Hans Kilian, seen as bullish on Ivorian supplies, was the initial trigger for a fund and investor-driven surge in U.S. futures to a 28-year high of $3,122 a metric ton.
In London, benchmark second-month cocoa futures hit a 22-year peak of 1,682 pounds ($3,277) a metric ton, before closing at 1,658 pounds, up 33 in brisk volume of 5,641 lots.
Analysts said cocoa prices could rise further due to robust global demand and a tight supply outlook.
"We haven't been at these nose-bleed prices in years," said Ralph Preston, futures analyst with HeritageWestFutures.com in San Diego. "Especially with that fundamental news coming out, that's going to really light a fire under this."
Jack Scoville, a vice-president for brokers the Price Group in Chicago, said the next key price target for second-month U.S. futures would be $3,140 a metric ton.
Benchmark ICE September futures settled up $72, or 2.4 percent, at $3,098 per metric ton, in dealings from $3,050 to $3,122, a high for the second-month dating back to February 1980.
Analyst Kilian, who is highly regarded in the cocoa market, has frequently moved cocoa futures prices with his West Africa crop reports, which he distributes to private clients only.
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