Chocolates are cheaper for Halloween, but prices are likely to rebound by Christmas thanks to rising demand for cocoa beans.
A global surplus sent cocoa prices plunging for most of the past two years, which helped to temper retail chocolate costs.
There are signs that the overhang is beginning to ebb as consumers eat away the excess.
Grindings, a measure of demand, have been climbing globally. That has caught the attention of hedge funds, who are finally starting to back away from bets that the commodity’s slump will continue.
“Low prices are the cure for low prices,” said Harish Sundaresh, a portfolio manager and commodities analyst in Boston for the Loomis Sayles Alpha Strategies team, which oversees US$5 billion. “A combination of improving grinding demand from chocolatiers ahead of the holiday season, over-crowded short positioning and persistently low prices over the past year has improved the price outlook.”
Cocoa futures traded in New York have erased this year’s losses. Prices that were down as much as 17 percent in late April on Friday settled at US$2,138 a tonne, up 0.6 percent since the end of December last year.
Hedge funds held a net-short position, or the difference between bets on a price increase and wagers on a decline, of 18,446 futures and options in the week that ended on Tuesday, according to US Commodity Futures Trading Commission data released on Friday.
That compares with 21,560 a week earlier and was a sixth straight contraction.
In the four-week period that ended on Oct. 8, average retail unit prices for chocolate were down 7.3 percent from the prior period, according to data from Chicago-based researcher IRI compiled by Bloomberg Intelligence.
Americans are expected to dole out US$2.7 billion on the treats, as total spending on Halloween climbs 8.3 percent to US$9.1 billion, the National Retail Federation estimated.
About 75 percent of US households hand out sweets to trick-or-treaters, and chocolate comes in as the clear favorite, according to the National Confectioners Association.
Ivory Coast, the world’s biggest cocoa grower, has tightened requirements to issue export licenses.
The nation is also in conversations with rival and No. 2 producer Ghana on how to boost earnings from the crop after the price slump cut government revenues and incomes for hundreds of thousands of small-scale farmers.
The World Bank has pledged its support for the nations’ plans to develop a coordinated strategy, which could include common policies on the marketing, storage and processing of cocoa.
The countries account for more than 60 percent of global supplies.
The revised export rules along with the possibility of more clampdown has “raised uncertainty about the speed of supplies reaching the market,” said Albert Scalla, senior vice president for INTL FCStone in Miami.
Cocoa inventories at warehouses monitored by ICE Futures US have fallen for 42 straight days, the longest slide since November 2014.
The drop comes partly amid the slowing pace of deliveries from Ecuador, the fourth-largest grower, after US officials rejected some shipments because of traces of a noxious weed in some cargoes.
The stockpiles are about 54 percent higher than a year earlier, though, helping to provide some cushion to the market.
Still, inventories could keep dropping because cash-market prices have gotten so high that it has become less attractive to deliver beans through the exchange, Scalla said.
If futures breach resistance above US$2,200, the next upside target sits at US$2,300, he said.
Spot gold dipped 0.7 percent to US$1,281.52 an ounce. The precious metal lost 1.8 from last week’s US$1,304.60 an ounce.
Copper was on Friday little changed at US$3.17 a pound, up 1.2 percent from last week’s US$3.13 a pound.
Rhodium was at US$1,550 an ounce on Friday and reached the highest since early 2012.
Ruthenium climbed to US$85 an ounce, touching the highest since 2013.
DEVELOPING TALENT: The electronics contractor is looking to recruit people to work in core tech fields and emerging industries like electric cars and robotics Hon Hai Precision Industry Co (鴻海精密), the world’s largest contract electronics maker, has launched a recruitment drive, offering a monthly salary of no less than NT$45,000 (US$1,485) to university graduates. For those with a master’s degree, the starting pay would be NT$52,000 per month at the minimum, while doctorate degree holders would receive at least NT$60,000 a month, Hon Hai said a statement issued early this week. The latest recruitment drive is aimed at attracting talent in core technology fields — artificial intelligence, semiconductors and next-generation mobile communications — and emerging industries — electric vehicles, digital healthcare and robotics, the
MRT TRAVEL FALLS: In February, ridership on the Taipei MRT System fell 8.96 percent from an average of 2.01 million per day in January Scooter sales jumped 13 percent last month as more commuters turned to two-wheelers to avoid public transportation amid the COVID-19 pandemic, the latest statistics showed. Sales expanded to 74,493 units last month, compared with 65,913 units in February, statistics released on Wednesday by Kwang Yang Motor Co (光陽工業) and the Ministry of Transportation and Communications showed. In the first quarter, aggregate sales slid 0.51 percent year-over-year to 186,627 units, from 187,580 units, data showed. Kwang Yang, the nation’s biggest scooter manufacturer, continued to lead the market by selling 24,136 vehicles last month, growing 6.12 percent from 20,785 units in the previous month, while
Asustek Computer Inc (華碩), the nation’s leading PC vendor, yesterday launched its first dual-screen gaming laptop powered by Intel Corp’s latest central processing units (CPUs). The PC manufacturer’s announcement closely followed the US chipmaker’s unveiling of its 10th Generation Core H-series, the fastest commercial mobile processors with speeds of up to 5 gigahertz. Although Asustek’s Zephyrus Duo 15, the highlight of its Republic of Gamers line, is not the company’s first laptop with two screens, it is its first designed specifically for gaming. Nestled between the primary display panel and the keyboard, the secondary display, which Asustek calls the ScreenPad Plus, is angled
NO ILL EFFECT: Last month’s data mainly reflected deals made in February, when the spread of COVID-19 was still relatively mild in Taiwan, housing brokers said Housing transactions in the six special municipalities totaled 19,824 units last month, up 7.8 percent from a year earlier, brokers said, citing government data. Last month’s data mainly reflected deals made in February, when the pinch of the COVID-19 pandemic was not yet evident, they said. Taoyuan posted the largest improvement, with housing transactions soaring 36.6 percent year-on-year to 3,676 units, local government data showed. Taiwan Realty Co (台灣房屋) attributed the pickup to the completion of two presale residential projects in the municipality. Houses in Taoyuan have increasingly gained in popularity in the past few year years due to relatively affordable home prices and