Cocoa prices are forecast to fall by the end of the year as the global market swings into surplus, a Reuters poll of 11 analysts, brokers and traders showed on Monday. The survey produced a median forecast of a global cocoa surplus of 114,500 tonnes in the 2016/17 season (October/September) compared with a deficit of 245,000 tonnes in 2015/16.
Supplies were expected to be boosted by a larger crop in top grower Ivory Coast of 1.80 million tonnes, up from 1.60 million in the current season. The crop in number two producer Ghana was also seen higher at 877,500 tonnes versus 800,000 tonnes. New York cocoa futures were seen ending the year at $2,850 a tonne, down 1.2 percent from Friday's close. Prices have already fallen sharply after rising to a 2016 peak of $3,237 last month.
London cocoa futures were forecast to end the year at 2,100 pounds a tonne, down 9.6 percent from Friday's close. Prices rose to a peak of 2,518 pounds earlier this month, the highest level in almost 40 years, boosted by the weakness of sterling following Britain's vote to leave the European Union. Poll participants said the currency shift, combined with a related softening in the value of the euro against the dollar, could curb demand for cocoa in Europe. Weakening currencies lead to increased prices in local currency terms.
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