Rabobank had already forecasted that the 2012/13 season will end in a 58,000 metric tons deficit - smaller than the International Cocoa Organization’s ICCO’s 45,000MT forecasted deficit - but now it says that the following crop year will be even less favorable.
In its Agri Commodities Monthly report, it said there would be a higher deficit of 75,000 metric tons for the 2013/14 season.
Will surplus cover consecutive deficits?
Laurent Pipitone, director of the ICCO’s economic division, previously told this site that the current year’s forecast represented “a small deficit” and said there were sufficient stocks on the market.
According to the ICCO, there was a surplus last year of 86,000 MT.
This would be enough to cover demand in the 2012/13 crop year, but would leave the market 47,000 MT short in 2013/14 if Rabobank’s double header deficit comes to fruition.
For the present crop year, Rabobank expects cocoa grindings to rise moderately, while global production stays flat.
Production is the principal growing region, West Africa, is expected to remain unchanged, but poor yields are expected in Asia’s largest cocoa producing nation Indonesia due to diseases and threats from substitution crops.
According to Rabobank, ICE futures are projected to rise 8% in Q2 2013 compared to the previous quarter to $2,350 per ton.
Liffe futures are set to rise 6.5% over the same period to £1525 per ton.
Both exchanges are set register further price increases up until Q1 2014, says Rabobank.