Cocoa prices should regain some ground by the end of 2017 following a prolonged slide fuelled by expectations for a global surplus in the current 2016/17 season, a Reuters poll of nine traders and analysts showed on Tuesday. The survey's median forecast for New York cocoa futures prices at the end of the year was $2,400 a tonne, up 17 percent from Monday's close. London cocoa futures were also seen rising, with a median forecast of 1,880 pounds a tonne for the end of 2017, up 12 percent from Monday's close.
Supportive factors included a potential pick-up in demand later this year, the prospect of lower farmer prices helping to curb production and concerns there could be further unrest in top producer Ivory Coast. "We expect some pick up in demand towards the middle of the calendar year due to lower prices," said Carlos Mera, senior commodity analyst at Rabobank.
New York cocoa futures fell by 33 percent in 2016, the biggest annual loss since 1999, and have fallen a further 4 percent so far this year. The decline was driven partly by an anticipated swing from a global deficit in the 2015/16 season (October/September) to an expected surplus in 2016/17. The survey had a median forecast for this year's surplus of 250,000 tonnes.
The International Cocoa Organization has estimated there was a deficit of 150,000 tonnes in 2015/16. The international body is due to issue its first forecast for 2016/17 later this month. Production in top grower Ivory Coast this season had a median forecast of 1.90 million tonnes, up 20 percent from the ICCO's estimate for 2015/16 of 1.58 million. Production was also seen climbing in number two grower Ghana, with a median forecast of 850,000 tonnes, up 9 percent from the ICCO's estimate of 778,000 tonnes for 2015/16.
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