Investing.com - US Cocoa Futures in both New York and London experienced a significant rise of over 4% on Monday, setting new record highs. This surge is attributed to a supply deficit caused by poor harvests in West Africa. Robusta coffee and sugar prices also saw an uptick.
In New York, July cocoa settled at $7,517 a metric ton, a $293 or 4.1% increase, reaching an all-time high of $7,735. Recognizing the dwindling global cocoa production, BMI revised its 2024 average price forecast for New York cocoa upwards by 60% to $6,000 a ton.
BMI's report highlighted that the decline in cocoa production is the key driver of rising cocoa prices. This pressure is expected to continue through the first half of 2024 and into the second half. The report also projected a global cocoa deficit of 350,000 tons for the 2023/24 season.
In London, July cocoa saw a 6.6% rise to 6,155 pounds per ton, setting a record high of 6,246 pounds.
In the coffee market, May robusta coffee settled at $3,343 a ton, marking a $35 or 1.1% increase. The tight supplies from Vietnam, the top robusta producer, are supporting the fundamentals and reducing the discount to arabica beans. ING noted that while a supply surplus is anticipated for the arabica harvest, robusta coffee is expected to witness a fourth consecutive year of deficit in the 2024/25 season. However, May arabica coffee fell 0.7% to $1.8175 per lb.
In the sugar market, May raw sugar settled 0.04 cents, or 0.2%, higher at 22.16 cents per lb. Market dealers cited concerns about dry conditions reducing the size of the cane crop in Brazil's Centre-South region during the upcoming 2024/25 season as the primary reason for the price increase. However, forecasts of rain returning to Brazil's sugar belt next week could potentially limit further price gains. Meanwhile, May white sugar rose 0.7% at $628.00 a ton.