COCOA fell in New York, paring some of Monday’s (Jul 22) big gain, as chocolate maker Lindt & Spruengli warned that the global chocolate market is facing pressure from high prices.
While Lindt reported organic sales growth in the first half, chief executive officer Adalbert Lechner said the global chocolate market was seeing a slowdown for some products. He said price increases for consumers helped to partially offset the impact of expensive cocoa beans, and expects cost inflation to continue into next year.
“It is quite difficult to predict where the futures market will go from here and how quickly we will see a further correction,” Lechner said on Tuesday. “The speed and the extent of the market correction will also depend a lot on the impact of the overall volume demand in the chocolate market.”
Futures fell as much as 2.6 per cent on Tuesday. The most active contract had settled 9.2 per cent higher in the prior session – the biggest jump since early May – on fresh concerns about shortages.
Prices have roughly doubled this year as poor harvests in West Africa fuelled a historic shortage, and consumers have started to feel the pinch of the rally as high costs filter through. Futures have eased from a record set in April as production is expected to improve on better weather conditions. But “it is still early in the season, and this may keep the market in a back-and-forth pattern”, according to a Tuesday ADM Investor Services note. BLOOMBERG
