Friday, 20 June 2008

Cocoa prices at over 20-year high

LONDON/NEW YORK: Cocoa prices surged to their highest level in over 20 years on Wednesday, adding extra pressure to global food prices, after reports of a possible supply squeeze in the world's top grower, Ivory Coast.
A report by independent analyst Hans Kilian, seen as bullish on Ivorian supplies, was the initial trigger for a fund and investor-driven surge in U.S. futures to a 28-year high of $3,122 a tonne.
In London, benchmark second-month cocoa futures hit a 22-year peak of 1,682 pounds a tonne, before closing at 1,658 pounds, up 33 in brisk volume of 5,641 lots.
Analysts said cocoa prices could rise further due to robust global demand and a tight supply outlook.
"We haven't been at these nose-bleed prices in years," said Ralph Preston, futures analyst with in San Diego. "Especially with that fundamental news coming out, that's going to really light a fire under this."

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