Cocoa futures for December 2010 delivery gained 1.281 percent today, rising to $2,887 per metric ton.
The gain was partially driven by an announcement from the Indonesian Cocoa Association; the group said that the nation's output of cocoa beans would fall 9 percent to 500,000 metric tons this year. Originally, growers had hoped to boost last year's production of 550,000 tons to 600,000 tons, but the weather isn't cooperating.
An extended rainy season and La Nina events have damaged some of the cocoa crops and hurt the overall quality of the harvest.
"The October-November period is supposed to be our second harvest, but heavy rain has destroyed our crops. Some exporters have asked their buyers to delay shipments due to limited supplies from farmers," said ICA chairman Zulhefi Sikumbang. "The rain was forecast to persist until February, so we are afraid it will also affect next year's production, as we may only have one good harvest."
Indonesia is the world's third-largest exporter of cocoa beans, trailing only the Ivory Coast and Ghana.
Cocoa beans have trailed other soft commodities this year, falling from nearly $3,500 per metric ton in January to a low of about $2,600 in September.