This crop year will see supplies of cocoa outpace demand by 200,000 metric tons, according to the trading arm of London-based Armajaro Holdings.
Bloomberg reports the cocoa trading head at Armajaro Trading said the smaller of two of the annual harvests in West Africa will generate a supply that is strong enough. The main crop's harvest typically begins in October.
"The mid-crop will be pretty good in West Africa," William Venables told Bloomberg during an interview.
At 11:15 a.m. on Thursday, cocoa futures were down 4.8 percent, a $154 dive to $3,057 per troy ounce.
Rabobank International estimates the deficit for the soft commodity during the 2011-2012 season will total 30,000 tons. But both ABN Amro NV and VM Group stated demand for cocoa will be stronger than demand for the soft commodity by 94,000 tons during that same time period.
The Ivory Coast, one of the world's top producers of cocoa, is presently rebuilding its exporting operation. The industry, which accounts for about one-third of the nation's revenue stream, suffered while serving as a pawn because of the November 2010 disputed presidential election that saw a 10-year incumbent's refusal to cede power to the declared victor until international peacekeepers forced him out about four months later.
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