Friday, July 22, 2011

ABN Amro: "Cocoa prices at risk of 'precipitous collapse'"

The futures are down $113/tonne in the U.S. and a slightly smaller percentage in London.
From Agrimoney:
Cocoa prices are at risk of "precipitous collapse" if prospects for supplies improve further, ABN Amro warned as it raised its outlook for world production of the bean and a slowdown in consumption growth.
The bank lifted by nearly one-half to 227,000 tonnes its forecast for the cocoa output surplus in 2010-11, highlighting an "extremely good season" for farmers in countries such as Ghana and Ivory Coast, the world's biggest producers.
"In West Africa, the main crop has been excellent," said the bank, whose research is undertaken with VM Group.
However, prospects for consumption looked weak, given the "gloomy clouds" hanging over European and US economies, where austerity measures have "yet to feed through into daily lift.
It was "doubtful" that a rise in cocoa grindings evident in recent months "is sustainable – after all, chocolate is one item in the weekly shopping basket that does not have to be bought"....MORE