Last week, the price of cocoa made another 10-month high at 2500. However, it failed to consolidates around the level and retraced a bit. At this point, the price is fluctuating within the 2400 – 2470 range. The recent rally was mainly caused by the lack of precipitations in Western Africa/ which may reduce the yield.
At the same time, the harvesting campaign will start in 4-6 weeks. So, the situation may change. On the other hand, the latest report on the refining of cocoa beans says that the demand declined in Q2 2012. Moreover, the ICE reserves of cocoa beans are around the 5-year high.
The chart below, courtesy of , reflects the current state of affairs in the market of cocoa beans. The experts say that weather will be the key market driver in the near future. If there is dry weather in Western Africa, the price rally may resume. However, if there are rains, the price will probably stay in the price range or initiate a downtrend.
