Cocoa futures jumped to their highest levels in two weeks on Wednesday after raw materials trader Olam International Ltd. affirmed there is a strong "upside" to the beans as demand outpaces supply, Bloomberg reports.
Sunny Verghese, Olam’s chief executive officer in Singapore, stated cocoa processing has been "stronger than expected," and prices have additional upside. For the 2011-2012 season that started in October, analysts forecast a 100,000 metric ton-deficit.
"We also expect to see higher prices for cocoa due to expectations of global output reduction and a resulting global market deficit," Zug, Switzerland-based Tiberius Asset Management AG said in a monthly report on February 14. "Harvest losses in West Africa are a real threat due to expected bad weather."
At 2 p.m. on Wednesday Cocoa had gained 5.33 percent, or $121, to $2,391 per metric ton, according to Bloomberg.
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