Cocoa prices soared amid signs of tighter supplies in Ivory Coast, the world’s top grower, raising prospects that chocolate costs will climb.
July futures jumped as much as 6.8 percent, the most ever for the contract. Farmers in West Africa are already locking in more forward sales for next year’s crop than traders were expecting, a sign that supplies from the current harvest are beginning to ebb.
The outlook for tighter supplies marks a shift for the market that’s been suffering from a global surplus. The overhang pushed prices down 32 percent over the past 12 months, helping to lower some retail costs for chocolate. The treats may not stay cheap for long, at least that’s what hedge funds are signaling. Money managers have backed away from their bearish cocoa bets for three straight weeks, U.S. government data show.
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