Bloomberg News

Goldman Sachs Cuts Cocoa Price Forecasts on Possible Surplus

December 01, 2011

(Updates with analyst comment in third paragraph.)

Dec. 1 (Bloomberg) -- Goldman Sachs Group Inc. cut its three, six and 12-month price forecasts by 9.3 percent on the growing potential for supplies to outpace demand in the 2011-12 season started last month.

Cocoa will be at $2,450 a ton on ICE Futures U.S. in New York in three, six and 12 months, down from a previous estimate of $2,700 a ton, Goldman said in a report dated today.

In November, cocoa prices fell to their lowest levels since March 2009.

“The growing likelihood that global cocoa production exceeds demand for a second year in the 2011-12 season that started last month is leading us to lower our three- to 12-month forecasts,” said Damien Courvalin, an analyst at the bank.

The implementation of the Ivorian reform of the cocoa and coffee sectors, which includes a price guarantee to farmers of as much as 60 percent of the international price, may support investment in cocoa, he said.

Cocoa has fallen 11 percent in New York over the past month.

--Editors: Sharon Lindores, Claudia Carpenter

To contact the reporter on this story: Isis Almeida in London at ialmeida3@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net


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