Cocoa is heading for its best quarter since 2009 as dry weather and crop delays in West Africa, the main growing region, send prices toward a two-year high and raise costs for chocolate makers.
Demand will exceed output by 119,000 metric tons in the 12 months starting in October, the first shortage in four years, according to Macquarie Group Ltd. Prices will enter a bull market, rising 5.9 percent to 1,750 pounds ($2,726) a ton in London by the end of 2013, the highest since September 2011, according to the median of nine estimates from traders surveyed by Bloomberg. Hedge fund bets on higher prices in New York are near a five-year high.
The main-crop harvest in Ivory Coast, the top producer, may be a month later than usual and MDA Weather Services says rain in southern growing areas has been more than 25 percent below normal. World output will drop 1.2 percent to a four-year low at 3.94 million tons in 2013-14, with 1.42 million tons from Ivory Coast, Macquarie estimates. The world confectionery market is worth $114 billion, and Commodities Risk Analysis estimates the industry uses as much as 75 percent global cocoa supplies.
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