Cocoa jumps as traders assess global supply-demand balance

(Sept 12): Cocoa futures rose as much as 6.6% in New York as prospects for bigger harvests were outweighed by concerns about tight global inventories. Ghana, the world’s second-biggest cocoa producer, said it would raise the amount it pays farmers by 45%. The move is expected to encourage more exports among growers that have been hoarding beans to await higher prices. It also may enable farmers to make longer-term investments that will bolster future harvests. Still, uncertainty remains over whether increased cocoa production next season will be enough to fill the hole in inventories created this year, said Judy Ganes, president at J. Ganes Consulting. “Even if production has a full recovery, you still could wind up with a deficit” because more beans will need to be ground to replenish cocoa butter and powder stockpiles, Ganes said. The tight supply-demand balance has left both cocoa and coffee futures “very sensitive to weather”, Ganes said. Meanwhile, arabica coffee futures fell ...