Cocoa prices hit 30-year high

The US, the world\'s biggest market for chocolate, is importing the most West African cocoa in three years as disease and taxes curb Indonesian supply, driving prices to a three-decade high. Cargoes from Ivory Coast, Ghana, Togo and Nigeria rose 2.6 per cent to 145,394 metric tonnes in the first four months while those from Indonesia fell 88 per cent to 7,301 tonnes, US trade data show. Increased competition for beans will mean cocoa averaging $3,300 (Dh12,120) a tonne in the fourth quarter on ICE Futures US in New York, 8.2 per cent more than now and the most since 1979, said Kona Haque, the analyst at Macquarie Group in London. \"For the US bean grinder, the lack of Indonesian beans has raised costs and diminished a regular supply in their formula,\" said Peter Johnson, president of Morristown, New Jersey-based Transmar Commodity Group, which has supplied manufacturers with cocoa for three decades. \"The trick is, how do you replace what used to be a cheapening agent that isn\'t so cheap anymore? The first thing is you use more African beans.\" Cocoa is not alone as surging demand for everything from oil to tin means supply is falling short of demand. Nestle SA, the world\'s largest food company, is forecasting the biggest ever increase in its raw material bill and Hershey, which began making chocolate more than a century ago, increased prices by an average of 9.7 per cent in March. The cost of living in the US rose 3.6 per cent in May, the biggest year-on-year gain since October 2008, the Labour Department said June 15. Cocoa traded in New York averaged $3,159 this year, heading for the highest annual average since 1978. The beans led gains in the Standard & Poor\'s GSCI index of 24 commodities in the second quarter, rising 6.7 per cent as the gauge declined 7.8 per cent. The MSCI All-Country World Index of equities dropped 0.5 per cent and Treasuries returned 2.4 per cent, a Bank of America Merrill Lynch shows. The US consumed 1.4 million tonnes of chocolate last year, generating $17.6 billion of sales, London-based Euromonitor International, a consumer research company, estimates. Cocoa represents about ten per cent of the price of the average chocolate bar, according to the International Cocoa Organisation in London, whose members account for about 85 per cent of global production and 60 per cent of consumption. From / Gulf News